JAKARTA – The Indonesian Palm Oil Producers Association (GAPKI) welcomed any reaction the government may take should the US Government proceed with plans to raise import duties on Indonesian export commodities, including palm oil ,but it also reminded the government to consider a number of factors first before going ahead with the reaction.
“Indonesia can also apply tariff barriers on commodity products imported from the United States. But it should also be thought out first because it would have an impact on industries in the country,” Danang Girindrawardana, Executive Diector of GAPKI said in a report uploaded on the organization’s official website on the weekend.
Girindrawardana said retaliation in the form of non-tarrif import duties on US goods may also affect industry at home who uses those products as part of their production and therefore costs would increase.
But he said that import barriers on pam oil in the United States, could also lead to higher production costs for some US industries and cause restlessness among businessmen whose industries rely on palm oil as a raw material.
“Raising import tax would not only disadvantage the exporters but also their own businessmen because prices would become higher,” Girindrawardana said.
The Gapki executive however, said that he was not sure that the United States would actually impose higher tariffs on Indonesian palm oil. He said that palm oil was widely being used as a raw material for a broad range of products, especially in the food and beverage industry and a higher import tariff would mean higher prices for industries there.
He admitted that the US government may rely on boosting its soybean or sunflower oil production to offset the move to raise import duties on Indonesian palm oil, but those crops were nowhere as effective as palmmoil economically.
Meanwhile, Mohammad Faisal, Director of the Center of Reform on Economic (CORE) Indonesia, was quoted ias telling Bisnis.com, as saying that It would also not be too easy for the United States to justify a decision to raise the import tariffs on Indonesian palm oil, especially using an anti-dumping reasoning.
The United States must be able to provide proof that the partner country was engaging in price dumping. It must also be able to give proof that industries in the Unirted States were undergoing a slower growth because of the dumping practice and thirdly, the US must find an action and reaction, link between the first and second reasons mentioned earlier.
For the Indonesian government, it must take the matter to the World Trade Organization (WTO) and prove that Indonesia was not engaged in dumping practices, Faisal said.
He also said that retaliation to any such US move could be done, including though the imposition of non-tariff barriers for imports from the United States.