JAKARTA (Reuters) - Indonesia’s trade minister said the country is scrapping plans to bring back an import tax on soybeans, ahead of a meeting to persuade U.S. officials to keep the Southeast Asian nation on a list of countries that receive preferential trade terms.
Indonesia, which buys most of its soybeans from the United States to churn out foods such as tofu and local dish tempe, removed the import tax in 2013 to quell rising food inflation.
But the agriculture ministry had been quoted by media in the past few years as requesting a reimposition of the tax to help boost prices of the commodity for local farmers.
“Tofu and tempe use soybeans from them (the United States) and they are hard to replace, so we can’t put up a tariff as a barrier,” Enggartiasto Lukita, Indonesia’s trade minister, told reporters.
That comes as an Indonesian lobby team is this month due to meet with the United States Trade Representative (USTR) after that body announced in April that it was reviewing the country’s eligibility for the Generalized System of Preferences - a U.S. program of giving reduced import tariffs for products sold by poor and developing nations.
The USTR said at that time that the review was because Indonesia had implemented a wide array of trade and investment barriers that had hurt U.S. commerce.
Under GSP, Indonesia gets reduced tariffs on about $2 billion worth of its exports to the United States, including some agricultural, textile and timber products. Indonesia’s total exports to the United States were worth $17.8 billion last year, trade ministry data showed.
Indonesia imported about 2.4 million tonnes of soybeans in the 2016-2017 marketing year, according to the U.S. International Trade Administration.
Lukita said the USTR had also complained about Indonesia’s restrictions on U.S. horticultural products such as apples. The government will remove trade barriers for such imports following a 2017 ruling by the World Trade Organization (WTO), he said.
In November last year, Indonesia lost an appeal ruling at the WTO in a dispute with the United States and New Zealand over Indonesia’s restrictions on imports of many food and animal products ranging from apples to chicken and beef.
Reporting by Bernadette Christina Munthe; Writing by Gayatri Suroyo; Editing by Joseph Radford