Indonesian SMEs Can Actively Participate in US GSP Trade Facility, Says Envoy

JAKARTA, KOMPAS.com – Indonesia’s Ambassador to the US Muhammad Lutfi said on Monday that the extension of the US Generalized System of Preferences (GSP) duty exemption facility for Indonesia will increase the bilateral trade.

The program — which provides duty-free entry into the US market for some 3,500 exports from designated beneficiary developing countries — will bring a good impact on Indonesian companies, including small and medium enterprises (SMEs).

These special tariff exemptions have been beneficial for the Indonesian SMEs that produce furniture, silver jewelry, handbags, and wooden doors, among others.

Also read: Indonesian Exports to US to Increase Following GSP Facility Extension

“Our SMEs can participate actively in enjoying the GSP program, especially those who produce handbags, wooden doors, jewelry,” Lutfi said in a virtual press conference on November 2.

US import tariffs on Indonesia products will be cut to almost zero percent, benefiting the Indonesian exporters. The GSP program provides the right incentives for Indonesia’s flagship products.

“This will also pave the way for the Indonesian SMEs to compete in the US market,” he added.
Lutfi said in 2019 Indonesia’s exports under the GSP facility reached $2.61 billion or 13.1 percent of the total exports to the US, which amounted to $20.1 billion.

Meanwhile, from January-August 2020, Indonesia’s exports to the US reached $1.87 billion, or up 10.6 percent from the same period last year.

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However, the ambassador said, of the 3,572 tariff items under the GSP program, only 729 or 20.4 percent that uses zero percent tariff into the US market.