The Indonesian government announced it will reduce tariffs on the import of Australian raw sugar, in exchange for Australia eliminating import duties on Indonesian herbicides and pesticides.
Australia’s Deputy Prime Minister and Minister for Agriculture and Water Resources, Barnaby Joyce, said the reduction in tariffs would increase the competiveness of Australian sugar exports into the important Indonesian market.
“Indonesia will lower the tariff on our sugar exports to the same concessional rate enjoyed by Thailand — around 5% currently — which will level the playing field for our exporters,” Joyce said in a press statement.
In exchange for the sugar deal Australia will eliminate import duties on Indonesian herbicides and pesticides.
“This is great news for our sugar industry, but it also demonstrates the strong trade relationship we share with Indonesia.
“It will ensure better returns for our exporters through improved market access, while also ensuring Indonesia can continue to have access to the world-class produce we are known for,” Joyce said.
The move follows the February 2017 deal Prime Ministers Malcolm Turnbull and Joko Widodo struck to each reduce tariffs on a key commodity as a mark of progress towards the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) currently under negotiation.
The estimated value of Australian sugar exports to the world was $2.2 billion in 2016-17, while the total agricultural, food, fishery and forestry exports to Indonesia were worth $3.2 billion in 2016, and imports from Indonesia were worth $843 million.