Driving Economic Growth, RI-Vietnam Agrees to Remove Industrial Product Trade Barriers

By : Herry Barus And Aldi Firhand. A | Thursday, September 13 2018 - 18:03 IWST

Presiden Jokowi Hadiri KTT APEC di Vietnam (Foto Setkab)
Presiden Jokowi Hadiri KTT APEC di Vietnam (Foto Setkab)

INDUSTRY.co.id - Jakarta, the Governments of Indonesia and Vietnam have agreed to immediately eliminate various trade barriers that still occur between the two countries, especially those related to industrial products.

This commitment is the result of a meeting between President Joko Widodo and Vietnamese President Trần Đại Quang.

"In the discussion of the two leaders of the country, among others, discussed the issue of bilateral trade as well as the target that will be achieved in the amount of USD10 billion in 2020," said Industry Minister Airlangga Hartarto according to his statement received in Jakarta, Thursday (09/13/2018).

President Joko Widodo and Vietnamese President Trần Đại Quang met at the Vietnam Presidential Palace, Hanoi, on Tuesday (11/9). Also attending the bilateral meeting were Coordinating Minister for Politics, Law and Security Wiranto, Foreign Minister Retno Marsudi, Industry Minister Airlangga Hartarto, Head of BKPM Thomas Trikasih Lembong, Cabinet Secretary Pramono Anung, and Indonesian Ambassador to Vietnam Ibnu Hadi.

Minister of Industry said, the government had asked Vietnam to facilitate Indonesian car exports. "Therefore, we need to review the double inspection policy for automotive," he said.

According to the Minister of Industry, this request will soon be followed up so that Indonesian car exports to Vietnam can return to normal.

Keep in mind, the Government of Vietnam implemented a policy to import completely built up (CBU) cars from Asean countries. Vietnam applies policies related to type testing and emissions testing through Regulation No. 116/2017 / ND-CP (Decree on Requirements for Manufacturing, Assembly and Import of Motor Vehicles and Trade in Motor Vehicle Warranty and Maintenance Services).

The number of Indonesian car shipments to Vietnam is quite large, which is around 30-40 thousand units per year from the total national car exports to all countries, which on average reach 225 thousand units per year. In January-July 2018, Indonesia's car exports to Vietnam were only around 1,528 units.

Other issues related to export tax for cement. "Of course the Vietnamese Government promises to solve various problems in accordance with the rules or laws that they can pay attention to," said Airlangga.

Meanwhile, the Minister of Industry said that the Vietnamese requested Indonesia to provide freedom for the application of local content or TKDN to mobile products.

"President Jokowi said that the TKDN calculation scheme in Indonesia is not only for hardware, but also can be compensated with software and others," he explained.

Furthermore, Vietnam inquired about the import duties imposed by Indonesia on imported steel products from Vietnam which had already been decided through the WTO.

"Mr. Jokowi said he would ask for time to immediately adjust to the decision and Indonesia respects the decision made by the arbitration institution," he said.

Minister of Industry added, all trade barriers between the two countries are expected to be resolved at the time of the 2018 IMF-World Bank annual meeting held in Bali, October 8-14.

"So, later in Bali, we will get progress from the results of the bilateral talks in Hanoi," he said.

Through increasing cooperation, the RI-Vietnam trade trend which has continued to increase in recent years will continue to be explored and developed for the progress of the two countries.

In 2017, the total trade value of RI-Vietnam last year grew by 8.64 percent, to become USD6.82 billion compared to 2016 which reached USD6.27 billion.

In an effort to build economic growth, the Indonesian government also expressed the desire of national investors to expand their business in Vietnam. For this reason, the Vietnamese government is expected to provide convenience, moreover Indonesia is one of the first investors in Vietnam.

Indonesia's investment in Vietnam in 2017 reached USD45.84 million. Until the end of December 2017, Indonesia's total investment in Vietnam reached 69 projects with a value of USD477.02 million.

Meanwhile, Vietnam recorded 8 investment projects in Indonesia, valued at USD51 million in the mining, media and manufacturing processing industries.

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