The United Arab Emirates (UAE) asked Indonesia to reduce import duties on plastic raw material. This is due to the global situation that prevents the UAE from exporting these commodities to European countries.
Secretary-General of the Indonesian Olefin, Aromatic and Plastic Industry Association (Inaplas) Fajar Budiyono said the UAE was experiencing difficulties in exporting its plastic raw material to several main destination areas. Therefore, they begged Indonesia to lower import duties.
Two of the UAE’s export destinations for plastic raw materials, namely countries in Europe and China, are currently experiencing an unfavorable situation to accommodate international trade activities.
As an importing country for plastic raw materials, Indonesia imports about 7 million tons of plastic raw materials every year. The domestic petrochemical industry is only capable of producing 3.4 million tons per year.
In other words, as much as 50 percent of the demand for plastic raw materials for the domestic petrochemical industry must be met through an import mechanism.
So far, half of Indonesia’s plastic raw material imports have come from ASEAN countries, including Malaysia, Singapore, Thailand, and Vietnam. The remaining 50 percent is imported from several regions.
Namely, 60 percent from the Middle East, including the UAE, and another 40 percent from Japan, South Korea, the United States, and India.
Regarding the plan to reduce import duties on plastic raw materials from the UAE, Indonesia currently imports 17,000 tons of polyethylene and polypropylene plastic raw materials from the country per month.
The two types of plastic raw materials, polyethylene, and polypropylene, are said to be the 2 tariff posts targeted by the UAE in the Indonesia-UAE Comprehensive Economic Partnership Agreement/IUEA-CEPA negotiations.