TRADE POLICY REVIEW:
Concluding remarks by the Chairperson
- Trade Policy Review: Indonesia
Despite the COVID-19-related meeting constraints, the seventh Trade Policy Review of Indonesia has offered us a good opportunity to deepen our understanding of recent developments in, and challenges to, its trade, economic, and investment policies. Since its last TPR in 2013, Indonesia's initiatives to maintain its position in the Multilateral Trading System and take advantage of the opportunities it offers have been greatly appreciated. Indeed, the 900 advance written questions submitted by 32 Members and the 43 delegations that took the floor during the first and second day underline the importance attached by Members to Indonesia's trade and investment policies and practices.
I would like to thank Indonesia's delegation, led by the Vice Minister of Trade at the Ministry of Trade, H.E. Mr. Jerry Sambuaga, for being physically present at this meeting and for its active participation in this exercise. Also, I would like to thank our discussant H.E. Ambassador Ángel Villalobos Rodríguez, Permanent Representative of Mexico to the WTO, for his insightful remarks, and all the delegations that took the floor for their valuable contributions to this Review.
Members commended Indonesia's sound macroeconomic policies and strong fundamentals that continued to ensure solid economic growth despite current global challenges. Economic growth was largely driven by domestic demand, and ensured economic resilience, low inflation and unemployment levels and enabled Indonesia to reach upper-middle income status for the first time in 2020. Indonesia's efforts to minimize the negative impacts of the COVID-19 pandemic, including on global supply chains and the free flow of essential goods, were acknowledged. Members welcomed Indonesia's trade-related structural reforms focused on improving the business environment, attracting foreign investment and developing infrastructure as well as efforts to improve transparency and address corruption. Members appreciated regulatory and institutional reform initiatives under the Economic Policy Packages (EPP) and welcomed the recent enactment of the Omnibus Law on Job Creation, which drew particular attention. To benefit more fully from global trade and value chains, Indonesia was encouraged to continue with productivity-enhancing structural reforms by, inter alia, further addressing transparency in policymaking, regulatory uncertainty, investment restrictions and the significant role of SOEs.
Members praised Indonesia for its active participation in the Multilateral Trading System and its improved commitments through the ratification of the Trade Facilitation Agreement whose full implementation was still under way. They commended its leading role in the WTO agriculture negotiations as well as its active participation in the fisheries subsidies negotiations, the Joint Statement Initiatives on investment facilitation and e-commerce, as well as its support for the full implementation of the Buenos Aires Declaration on Women's Economic Empowerment. Furthermore, Indonesia was encouraged to, inter alia, accede to the Government Procurement Agreement, and participate in the Joint Statement Initiatives on services domestic regulation and MSMEs, as well as to continue actively engaging in discussions on the future of the WTO. Indonesia's role at the G20 and G33 groupings as well as its ASEAN leadership were appreciated. Members also referred to Indonesia's increased focus on RTA initiatives including its participation in the Regional Comprehensive Economic Partnership (RCEP) and its impact on the Multilateral Trading System. Involvement in dispute settlement cases was noted and Indonesia was, inter alia, urged to contribute to the smooth running of relevant procedures. Members also highlighted its WTO notification record and encouraged it to address certain pending notifications.
Members commended Indonesia's commitment to greater trade facilitation and connectivity through its Authorized Economic Operator (AEO) programme, the ASEAN Single Window, as well as the ASEAN Wide Self Certification scheme and the ASEAN Customs Transit Systems, both of which went live in 2020. The increase in the average applied MFN tariff rate, tariff peaks and complex tariffs were noted; at the same time, Indonesia was urged to rectify tariffs exceeding their WTO bound level. Persisting frequent recourse to anti-dumping and safeguard action was noted. Members requested Indonesia to prevent the impact of non-tariff measures on a wide range of items of interest to them, including trading rights limitations, prior import verification requirements, import licences, local content requirements, domestic manufacturing requirements, export prohibitions, export restrictions, export taxes, and the use of standards and SPS measures. Members recalled that the adoption of TBT and SPS measures, notably relating to halal products, horticultural products and fresh foods, must take place in a manner that is compatible with multilateral disciplines. Concerns over the potential impact of the Halal Product Assurance Law and its implementing regulation were expressed and further explanations were requested. Members commended Indonesia for ratifying various IP treaties and strengthening its domestic IP regime.
Some other issues were also raised by certain Members. The recent and significant steps to combat IUU fishing were commended. Some Members congratulated Indonesia on policy changes to its domestic fossil fuel subsidies. On services, questions were asked about the impact of new telecommunications regulations in improving access to infrastructure and developing telecommunications services. Some Members urged Indonesia to remove market access barriers faced by foreign financial services firms and address restrictions on foreign-owned shipping and insurance companies in the transport of certain commodities.
The above are some of the key issues that had emerged in our discussion. I hope that the Indonesian delegation will consider and further reflect on these issues and on the many constructive comments, both broad and detailed, that it has received during this Review. Members look forward to receiving the answers from Indonesia to any outstanding questions within one month, at which point the Review will be successfully concluded.