Jakarta: The US government's decision to remove Indonesia from the list of developing countries will make its trade balance with the US record a deficit, Secretary of Coordinating Minister for Economic Affairs Susiwijono stated.
"Oh yes, it is clear (at risk of a deficit)," Susiwijono stated in Jakarta on Monday, February 24, 2020.
The official explained that it was linked to the import duty facility or the Generalized System of Preferences (GSP) scheme provided by the US to developing countries, including Indonesia, which would be lost.
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"The US’ decision to remove Indonesia is linked to trade facilities since the consequences will be on the GSP and so on," Susiwijono revealed.
Once Indonesia does not receive the GSP facility, it will have to pay import duties at the normal rate or Most Favored Nation (MFN).
"Our GSP is very large. Friends of the Ministry of Trade will explain," Susiwijono noted.
According o him, Indonesia's trade with the US was still in surplus as was apparent from the Central Statistics Agency (BPS) data indicating that Indonesia's trade surplus with the US in January 2020 had reached US$1.01 billion.