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An Indonesian minister says the newly signed Eurasian trade agreement will cut regional tariffs on Indonesian palm oil to close to zero.
Indonesia recently signed a free trade agreement with the Eurasian Economic Union (EAEU), a bloc comprising Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan. The Jakarta Globe asked Trade Minister Budi Santoso how much the deal would reduce tariffs on Indonesian palm oil, given that the commodity is a key export to Russia, the bloc's largest economy.
"The Eurasian Economic Union agreement will cut tariffs on almost all products to close to 0%. This also applies to our palm oil," Budi said at a press conference in Jakarta on Friday.
Budi did not disclose the exact import duty rate that would apply to Indonesian palm oil. The minister went on to say the deal would offer ample opportunities for Indonesia's garment and footwear sector. Jakarta hopes the agreement will help double its trade with the EAEU, which totalled around US$4.5 billion in 2024.
"This could also be our gateway to neighbouring countries," Budi said, citing Ukraine and Uzbekistan as examples.
Budi was in St Petersburg last week to sign the trade agreement with the EAEU.
Jakarta has previously said it wants the agreement to take effect in the fourth quarter of 2026 or by 2027. The document still needs approval from lawmakers before that can happen.
The EAEU has committed to granting preferential rates on 90.5% of tariff lines, equivalent to 95.1% of the bloc's imports from Indonesia. In turn, Indonesia is prepared to grant preferential rates on 90% of tariff lines for goods from the five-member bloc. Russia's government has said Jakarta's average tariff rates on EAEU goods will fall from 10.2% to 2%.
Source: Al Mal Forum