JAKARTA – The governments of Indonesia and the United States (US) have agreed to eliminate import duties to 0% on Indonesian textile and garment products through a Tariff Rate Quota (TRQ) mechanism.

The TRQ allows a 0% tariff on Indonesian textile and garment exports to the US up to a certain volume, calculated based on the amount of textile raw materials imported by Indonesia from the US, such as cotton and man-made fibers.

“This will certainly benefit 4 million workers in this sector, and if we include their families, it will significantly impact 20 million Indonesians,” Coordinating Minister for Economic Affairs Airlangga Hartarto said in a virtual press conference in Jakarta on Friday (20/2).

In addition to textiles and garments, a total of 1,819 Indonesian tariff lines are now eligible for 0% tariff facilities, including palm oil, coffee, cocoa, spices, rubber, electronic components including semiconductors, and aircraft components.

In general, the US will continue to impose a 19% reciprocal tariff on Indonesian imports. However, specific exemptions apply to selected products identified in the agreement.

All points of cooperation are set out in the Agreement on Reciprocal Trade (ART), which was officially signed on Thursday (19/2) US time, as reported by iqplus.info.

Airlangga explained that procedurally, the ART agreement will take effect 90 days after all legal processes are completed in both countries.

In Indonesia, the process involves consultations with the House of Representatives (DPR RI), while in the US it will be finalized through the country’s internal parliamentary mechanism.

The agreement is dynamic, as both parties agreed that amendments may be made in the future based on written consent.

“There is also room for different tariff arrangements, whether lower, as discussed in the Council Board that will be established,” Airlangga said.

He added that the government is committed to accelerating the ratification process so that the benefits can be felt by the wider public.

“Next, we will immediately convey this to the DPR RI regarding the relevant legislation. The objective of this agreement is also to achieve Indonesia Emas, and therefore it is referred to as a New Golden Age for both Indonesia and the United States,” he added. (DK/ZH)