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Indonesia Strikes Back European Union, Imports of Processed Milk Will Be Charged 25%

Indonesia Strikes Back European Union, Imports of Processed Milk Will Be Charged 25%
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Indonesia cannot remain silent about the European Union’s policy of imposing an 8-18% import duty on Indonesia’s biodiesel imports. In response to the European Union’s action, Indonesia plans to impose a 20-25% import duty on European dairy products.

Quoted from Reuters on Friday (09/08/2019), Enggartiasto said he would provide recommendations to the relevant ministries and institutions to impose import duties on processed milk products from Europe by 20-25%.

This step is in response to the European Union’s policy of blocking Indonesia’s biodiesel products. Enggartiasto said, if the European Union continued to impose an import duty on biodiesel of 8-18%, then he advised importers of processed milk products from Europe to supply from countries other than Europe.

“Then they will apply 8-18% tariffs, I am fair to them, we will also apply the same tariffs at the time. So (importers of dairy products) just look for new sources. Like Australia, New Zealand, the United States,” said the Minister Trade Enggartiasto Lukita after the National Seminar on Economic Transformation for Indonesia organized by the Coordinating Ministry for Economic Affairs, in Jakarta, (9/8/2019).

Furious at the European Union’s action to impose import duty tariffs on Indonesia’s biodiesel imports, Trade Minister Enggartiasto Lukita will introduce import duty tariffs on all dairy products from Europe.

Quoted from Reuters on Friday (08/08/2019), Enggartiasto said he would immediately provide recommendations to the relevant ministries and institutions to impose import duties on processed milk products from Europe by 20-25%.

Currently, processed dairy products from the European Union and the United States (US) are subject to a tariff of around 5% in Indonesia. Then, the import value of processed milk and egg products according to the Ministry of Trade data in 2018, the value reaches US $ 1 billion or equivalent to Rp. 14.2 trillion (exchange rate of Rp. 14,200).

The Minister of Trade, Enggartiasto Lukita, who wanted to impose an import duty of up to 25% on imports of dairy products from Europe, advised importers of dairy products to supply from countries other than Europe.

“Then they will apply 8-18% tariffs, I am fair to them, we will also apply the same tariffs at the time. So (importers of dairy products) just look for new sources. Like Australia, New Zealand, the United States,” said Enggar after attending the National Seminar on Economic Transformation for Indonesia organized by the Coordinating Ministry for Economic Affairs, in Jakarta, (9/8/2019).

According to him, if the European Union does not take a fair decision, RI will also act.

“I gave a strong message. I have also met with the European minister that you are welcome to wear something as far as the parameters are fair. If it is not fair, then you start protectionism and tradewar. And we cannot be silent,” stressed Enggar.

For information, initially, the European Biodiesel Board (European Biodiesel Board) complained about the issue of anti-subsidized biodiesel exports from Indonesia. Therefore, since September 2018 the European Commission has conducted an anti-subsidy investigation.

From the results of the investigation, European Union authorities claimed evidence of the granting of subsidies from the government in the form of massive tax incentives for CPO exports and their derivatives that violated WTO rules. The provision of these subsidies is also considered to affect the price of Indonesia’s biodiesel.

Four biodiesel exporters from Indonesia who will be subject to import duties are Ciliandra Perkasa with an import duty of 8%, Wilmar Group 15.7%, Musim Mas Group 16.3%, and Permata Group 18%.

Indonesian biodiesel exported to European Union countries will be subject to an 8-18% import duty by the European Commission. This import duty is imposed because the European Commission considers that Indonesian biodiesel exporters have received massive export incentives from the government.

Reported by Reuters on Thursday (7/25/2019), four biodiesel exporters from Indonesia who will be subject to import duties are Ciliandra Perkasa with an import duty of 8%, Wilmar Group 15.7%, Musim Mas Group 16.3%, and Permata Group 18%.

Initially, the European Biodiesel Board (European Biodiesel Board) complained about the issue of anti-subsidized biodiesel exports from Indonesia. Therefore, since September 2018 the European Commission has been investigating anti-subsidies

As a result of the investigation, European Union authorities claim evidence of the government providing subsidies in the form of massive tax incentives for CPO exports and also their derivatives.

Even so, the import duty is still temporary. Because the European Union authorities will still be waiting for the results of a thorough investigation from the European Commission regarding massive subsidies on the four exporters. The results of this investigation must be completed on January 4, 2020. Thus, the authorities of the European Union countries can set import duty regulations on Indonesian biodiesel.

Of course, this is the second ‘slap’ from the European Union to Indonesia. Previously, the European Union itself stated that Indonesian palm oil could not be used as a renewable energy fuel.

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