WASHINGTON, DC, US: United States’ decision to extend Generalized System of Preferences (GSP) to Indonesia brought new optimism to on-going efforts of bringing the two countries closer economically.
Not only the extension was predicted to bring the trade values up, but it is also predicted to increase the investment between the two countries.
According to Indonesian Ambassador to the US, Muhammad Lutfi, this extension is a result of a close relation at the highest level between Indonesia and the US. “GSP is highly important in boosting Indonesia’s exports in a highly competitive US Market, especially as the US is our second biggest non-oil and gas market.”
In 2019, with GSP’s assistance, Indonesia’s exports were valued at US$ 2.61 billion, or 13.1% of the entire Indonesia’s export to the US. For the period of January-August 2020, the export was valued at US$ 1.87 billion, an increase of 10.6% y-o-y.
Indonesia will be focusing on several products, namely:
- Apparel, rubber, footwear, electronic and furniture.
- Wooden products, travel goods, chemical, costume and gold jewelry, children toys, wigs, and paper products.
- Machinery, plastics, automotive spare parts, medical devices, and organic chemical products.
Indonesia has 3572 items in the GSP, but Indonesia has only utilized 20.4%. Indonesian Government, together with Indonesian Chamber of Commerce will increase the socialization efforts to encourage more Indonesia Exporters to utilize GSP.
Indonesia aims to increase the GSP status to Limited Trade Deal, to double the trade volume between Indonesia and the States in 2024 to US$ 60 billion.