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Trade Made Easier

2017-09-25 15:06:12

When the World Trade Organisation met in Bali for its annual ministerial conference in 2013, Indonesia was one of the strongest advocates of an agreement to simplify global trade.

Four years later, however, Indonesia is one of only a small group of WTO members yet to ratify the Trade Facilitation Agreement.

Trade tariffs have declined sharply during the past two decades despite increasing protectionist sentiments over the past several years. But the WTO estimates that red?tape at borders still imposes a “tax” equivalent to a doubling of the price of goods.

The facilitation agreement, which took effect in February this year, aims to boost global trade by around US$1 trillion per year by simplifying customs procedures.

It covers everything from single submission points for trade documents, to the electronic exchange of information, and advance notices of any change to customs procedures.

Indonesia is seen as one of the biggest beneficiaries.

One study estimated that ratifying the agreement would boost Indonesian export growth by up to 3.5 percentage points and GDP growth by 0.9 percentage points every year until 2030.

All of Indonesia’s ASEAN neighbours have ratified the agreement, including poorer economies such as Myanmar.

AIPEG is assisting the trade ministry hold a series of events to speed up ratification of the facilitation agreement.

At a coordination meeting held last month, Achmad Shauki, AIPEG Senior Economist, said that Indonesia had already introduced measures to simplify trade as part of the president’s reform packages aimed at raising competitiveness.

“Indonesia is on the right track,” he said.

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