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Enggartiasto Lukita said he will immediately recommend to an
inter-ministerial team a 20%-25% tariff on EU dairy products as
the appropriate response to the EU's plan to impose anti-subsidy
duties of 8%-18% on palm biodiesel from Indonesia.
The EU duties would be another blow to Indonesian biodiesel
producers after the 28-nation block said in March that palm oil
should be phased out of renewable transportation fuels due to
palm plantations' contribution to deforestation.
Lukita said he had met with his European counterparts to discuss
the palm oil issue and warned them that the planned EU duties
must be based on "fair parameters".
"If the parameters are not fair, it's a step toward
protectionism and a trade war, and we will not stay silent for
the unfair treatment," he told an economic forum in Jakarta.
Biofuel producers in Indonesia have said they do not receive
subsidies from the government.
EU representatives in Indonesia were not immediately available
for comment. Lucas Cibor, interim head of the EU mission to
ASEAN, on Thursday said the EU had explained its policy on
sustainable biofuels to Indonesia and Malaysia.
Indonesia and Malaysia, the world's top two palm oil producers,
have repeatedly said the European measures against the edible
oil industry are discriminatory.
The European Commission is still investigating the palm
subsidies allegation, but the proposed duties may be put in
place by Sept. 6.
Lukita did not give a timeline for the proposed Indonesian
tariffs on dairy products. Dairy importers have been asked to
buy products from suppliers in Australia, New Zealand and the
United States, he said.
Jakarta has recently signed a free trade agreement with
Australia that will remove tariffs on dairy products starting
from next year. Levies for most dairy products from the EU and
the United States are now around 5%.
Indonesia's total dairy and egg imports in 2018 were worth $1
billion, trade ministry data showed.
European spirit makers earlier this year said they faced
difficulties exporting drinks to Indonesia. An Indonesian trade
ministry official said there were delays in granting import
licenses for spirits from Europe but denied these were related
to the dispute over palm oil.
(Reporting by Bernadette Christina Munthe; Writing by Gayatri
Suroyo; Editing by Tom Hogue)
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