Durian. The United States has decided to extend Generalized System of Preferences, or GSP, facility for Indonesia which would potentially and significantly increase trade activities between the two countries.
The GSP facility allows duty exemption for export products and is granted by the US government to eligible beneficiary countries. The United States Trade Representative, or USTR, has announced the decision after review for Indonesia’s status had taken place since 2018.
According to Indonesia’s Trade Minister Agus Suparmanto, this decision will bring positive impacts on business activities, both for Indonesian exporters and US importers.
“The end result of Indonesia’s GSP status review brings a positive certainty, both for Indonesian exporters and US importers, that they can continue and even upscale their business activities,” Suparmanto said in a statement on Nov.2.
“It is even more good news amid our efforts to minimize the impact of covid-19 pandemic on Indonesia’s and US economy.
Suparmanto added that even though Indonesia continued to benefit from GSP facility during the review process, the review result reaffirmed that Indonesia will be able to continue benefiting from the scheme for at least the next few years.
GSP is a trade facility, given in the form of import duty tariffs exemption, which has been granted by the US government to developing country since 1974, and Indonesia first received the facility in 1980.
In 2019, Indonesia’s export that used GSP facility amounted up to $2.61 billion, or 13.1 percent of Indonesia’s total export to the US. In addition, Indonesia is the second country behind Thailand to have taken the biggest advantage from GSP.
