Indonesia scrapping plans to bring back soybean import tax

JAKARTA: Indonesia’s trade minister said the country is scrapping plans to bring back an import tax on soybeans, ahead of a meeting to persuade US 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 US) 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 US programme 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 trade and investment barriers that had hurt US commerce.

Under GSP, Indonesia gets reduced tariffs on about US$2 billion (RM8.06 billion) worth of its exports to the US. Indonesia’s total exports to the US were worth US$17.8 billion last year, official data showed.

Indonesia imported 2.4 million tonnes of soybeans in the 2016-2017 marketing year, according to the US International Trade Administration. – Reuters