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Home arrow Latest News arrow Indonesia and Mozambique Officially Sign PTA, 242 Tariff Dropped

Indonesia and Mozambique Officially Sign PTA, 242 Tariff Dropped PDF Print E-mail
Written by Maizer   
Wednesday, 28 August 2019

The Minister of Trade Enggartiasto Lukita and the Minister of Industry and Trade of Mozambique, Ragendra Berta de Sousa officially signed the Indonesia-Mozambique Preferential Trade Agreement.


(IM-PTA) in the city of Maputo, Tuesday, August 27, 2019 local time. The process towards signing requires a year before it is realized. The signing took place on the sidelines of the biggest trade show in Mozambique, the 55th International Trade Fair - FACIM 2019.


"I am very proud that Indonesia finally has a first trade agreement with a country on the African continent, which will also be a new milestone in expanding market access on a continent called the continent of hope," said Minister Enggar.


Stages are not instant. The IM-PTA negotiations took place exactly one year after its launch during the Indonesia Africa Forum (IAF) in Bali on April 11, 2018 by Trade Minister Enggartiasto Lukita and Mozambique Minister of Industry and Trade Ragendra Berta De Sousa.


"After negotiating three times, the negotiations were completed well and last month in Bali, during the implementation of the Indonesia-Africa Infrastructure Dialogue (IAID) the two countries officially announced the completion of the IM-PTA negotiations," the Trade Minister continued.


According to him, this agreement is one of the most quickly resolved. It only took 1 year, almost the same as the Indonesia-Chile CEPA negotiations, which were also completed in 1 year. "This shows the commitment, struggle and hard work of the negotiating team together with representatives of relevant Ministries and Agencies," said Enggar.


For Indonesia, the signing of the IM-PTA today is a follow-up to President Joko Widodo's instructions to increase market access to non-traditional markets in order to encourage exports. As for Mozambique and Indonesia, this signing is a follow-up to the results of the two countries' President's meeting at the 2017 IORA meeting.


On the African continent, Mozambique is the 17th export destination country and the 18th source of imports for Indonesia. Our total trade in 2018 is only USD 91.88 million, with Indonesia's exports recorded at USD 61.4 million.


Enggar hopes that the signing of the PTA with Mozambique can encourage the interest of en.trepreneurs to better utilize the potential of non-traditional markets, including investment. "After this, the two countries will encourage business interaction through regular business forum meetings and business matching," he  said


Content of the Agreement Through IM-PTA, Indonesia will reduce tariffs for 242 tariff posts to Mozambique including cotton, tobacco, fishery products, vegetables, and beans. While Mozambique will provide tariff reductions for 217 tariff posts to Indonesia, including fishery products, fruits, palm oil, margarine, soap, rubber, paper products, footwear, textile products.


Indonesia's main export products to Mozambique in 2018 are palm oil and its fractions (USD 27.3 million), soap (USD 9.8 million), industrial monocarboxylic fatty acids (USD 7.9 million), organic surface-active agents (USD 3.3 million), paper and paperboard (USD 2.8 million), sacks and bags (USD 1.5 million), margarine (USD 1.5 million), portland cement (USD 1.1 million). Meanwhile, Indonesia's main import products from Mozambique are groundnuts (USD 22.6 million), unmanufactured tobacco (USD 4.1 million), cotton (USD 2.8 million), manganese ores & concentrates (USD 417 thousand), ferro-alloys (USD 246 thousand), dried leguminous vegetables (USD 197 thousand).


After the Signing of the IM-PTA After the IM-PTA agreement was signed by the two Ministers of Trade, the next step is the process of ratifying an international agreement (ratification) in accordance with their respective domestic provisions so that the IM-PTA can be put into effect. For Indonesia, the ratification process is completed when a Law (UU) or Presidential Regulation (Perpres) on the Ratification of the IM-PTA, and a Regulation of the Minister of Finance (PMK) has been issued.


After the ratification is completed, the two countries will send a diplomatic note informing that the ratification process has been completed and the IM-PTA is valid for 60 days from the exchange of the diplomatic note.


"In the process of ratification, the Government of Indonesia is ready to work with the DPR. In parallel with the ratification process and most importantly, it is widely disseminated to the public, including business actors and associations regarding the benefits of the IM-PTA. The increase in exports is expected to occur after the implementation of the PTA with Mozambique. On the other hand, it is hoped that business actors can strengthen their competitiveness, "said the former member of the DPR.


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