Indonesia, UK Ink Cassava Export Agreement

TEMPO.CO, Jakarta - Indonesia and the UK have agreed on the country's concession schedule for the Tarif Rate Quota (TRQ) with country-specific Indonesia for cassava products, especially after the UK's Brexit. With this, Indonesia could export cassava (HS 071410) up to 660,000 tonnes per year with a 6 percent tariff.

The agreement was signed in Geneva on October 24 during a Senior Official Meeting (SOM) of the World Trade Organization (WTO). Indonesian International Trade Agreements Negotiation DG Djatmiko Bris Witjaksono inked the agreement with the UK's Trade System  DG Joanna Crellin.

Djatmiko believed that Indonesia and the UK's agreement was due to Brexit offering chances and challenges. Firstly, TRQ is country-specific. Meaning, that 660,000 of cassava per year is only intended for Indonesia. Second, this agreement will reduce cassava's import tariff into six percent.

"This will benefit the Indonesian exporters. Compared to the tariff before TRQ, Indonesia must be sanctioned with the regular tariff of the most favored nation in Indonesia amounting to £7.90 per kilogram," he said.

According to trademap.org data, the domestic demand for cassava products in the UK averaged 4,268 tonnes for the past 10 years. Indonesia's contribution to that demand has been relatively small, with 1.95 percent of the market share from the total UK imports.

The data showed that for the last five years from 2018 to 2022, Indonesia exported 27,000 tonnes of frozen cassava (HS 071410) globally, equal to US$19.2 million. Meanwhile, Indonesia's export to the UK was 80 tonnes each year.

Despite this fact, the export value rose each year, with US$ withUS$122,000 in 2018, US$138,000 in 2019,  US$146,000 in 2020, US$241,000 in 2021, and US$316,000 in 2022.

Thus, Djatmiko stressed that TRQ is a critical facility for anticipating potential cassava exports. "Therefore, Indonesian farmers are expected to increase their cassava production capacity. Furthermore, business entities or exporters hope to boost the implementation of TRQ with the 6 percent tariff. Hopefully, the negotiation results may bolster productivity spirits and cassava's competitiveness to become an export commodity in the UK's markets," he concluded.

YOHANES MAHASO JOHARSOYO

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