Trade in indonesia – Goods – Procedure

Review by : Yuli SE., MM

For most developing countries, the trade sector especially foreign trade plays an important role in supporting the country’s economy. The trade sector based on industrialization plays a key role because the products produced are expected to be able to compete with other industrial products of other countries in the global market. The progress of industrial and trade sector development is expected to contribute significantly to the development progress of economic growth.

A. History

Initially, trade relations were limited to a single country territory, but with the growing trade flows, then the trade relations were not only between entrepreneurs in one country territory but also with traders from other countries, including Indonesia. Even these trade relations are increasingly diverse, including the way they are paid. Import export activities are based on the condition that no country is truly self-sufficient because each country needs each other.

Every country has different characteristics, both natural resources, climate, geography, demography, economic structure and social structure. These differences lead to differences in commodities produced, the composition of the required costs, the quality and quantity of the product. Directly or indirectly requires the execution of the exchange of goods and or services between one country and another. Therefore, between countries in the world need to establish a trade relationship to meet the needs of each country.

International trade transactions, better known as imports, are essentially a simple transaction that is nothing more than buying and selling goods between entrepreneurs who live or domicile in different countries.

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B. Export Commodities

Export commodities are goods from Indonesia that are sold abroad, Examples of exports made by the state of Indonesia include:

Agricultural and marine products: rubber latex, tea, black pepper, white pepper, coffee, rattan, shrimp, tuna, and others.
Industry Result: Plywood of clothing, tin, aluminum, palm oil.
Mining output outside oil and gas: Copper seed, nickel ore, bauxite, coal.
Forest products: wood, rattan, incense, dammar, wicker goods, furniture, and others.

Indonesia registered imports of food that should be produced from agricultural land in the country, such as rice, potatoes, corn and others commonly found in Indonesia. Unfortunately, domestic demand is not proportional to production, so the government is forced to open imported faucets to avoid scarcity of food that can thus increase the selling price in the market.

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C. Import Commodities

Inadequate government policy toward agricultural development steps, especially in the application of new technology in agriculture sector such as genetic engineering of food seeds, make Indonesia increasingly difficult to meet the food needs of the country. Hence we need to do import commodities

Import Commodities are goods purchased from abroad, which include:

Consumer Goods, consisting of food and beverages for households, transportation equipment, and so on
Raw and auxiliary goods, including food and beverages for industry, industrial raw materials, fuels and lubricants, spare parts and more
Capital goods, including factory machinery, tractors, and motor vehicles.

1. Export Procedure

Starting when the exporter prepares the goods to be exported by packaging, stuffing to the container until the goods are ready to be shipped. After the goods are ready and there is a schedule of ships that will transport the goods, then the exporter can file a customs document known as the Export Goods Notification (PEB).

Each PEB document is required to pay non-tax state income paid at the bank or at the local customs office. For the export tax amount, each item is also different determined by the decision of finance minister. The PEB contains data of exported goods including:

Exporter Data.
Recipient data.
Customs Broker Data (if any).
Means of carrier to be transported.
Country of destination.
Detailed goods, such as quantity and type of goods, accompanying documents.

After the PEB is submitted to the local Customs office, export approval will be granted and goods may be delivered to the port which may then be loaded onto the vessel or means of transport to the destination country.

Each item to be exported has its own rules depending on the goods. Such as for wooden goods, exported timber requires documents of Surveyor Reports, endorsements of the Wood Industry Revitalization Agency, for other goods in the form of minerals also exist which require using surveyor reports.

For some goods belonging to the category of waste, there are required to used quotas. For goods in the form of rice is required if domestic needs have been met and there is a license from BULOG. However, there are many exports that are without conditions or permits from relevant agencies, such as bicycle, plastic, syrup, shoe, cable, iron, steel, plastic toys, and others.

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2. Import Procedures

Although Indonesia produces so much rice it still can not meet the needs of its population due to a large number of the Indonesian population, hence this is why we need imports. As we know the meaning of imports of goods, in general, is the act of entering goods into the country (Indonesia), usually in large quantities for trading purposes (commercial) or not commercial, and involves Customs as the supervisor of the entry / Goods traffic within a country.

And about import procedures in Indonesia is basically, if we want to import goods from abroad, there are some things we must know:

Whether the goods we import will be allowed by the government to enter Indonesia (excluding prohibited goods). To find out the goods including goods ban or not, can be seen at www.insw.go.id
Documents or permits that must be prepared if the goods enter Indonesia
Information on the Tariff Post or HS (Harmonized System) of the goods (Regarding the payment of Import Tax and Import Duty)

When we already know these things, then what we have to do next is:

Shipping the imported goods from the country of origin to Indonesia.
Refinance Import Duty and Import Tax according to the type of goods we import. The amount of import duty and tax tariff can be seen in Indonesian Customs Tariff Book (BTKI or HS). Apart from the current HS book to know a number of import duties and import taxes we can see through the customs website (www.beacukai.go.id), INSW portal (www.insw.go.id), or through smartphone applications.
Conduct customs notification to the government by using Goods Import Declaration document (PIB) along with its complement document. After that Customs will assign green, yellow, or red lines to our import process (there are certain procedures and criteria for each path).
After our importation is approved by Customs, it will be issued SPPB document (Letter of Approval of Expenditure of Goods). The definition of expenditure here is the expenditure of goods from the customs area (port). If SPPB is issued, then the imported goods are legally “allowed” to exit the port and enter the Indonesian customs area.
Transporting imported goods from customs area (port) to our place, usually using trucking, railway, or other modes (inland transportation).

Statistics show about 230-237 million people in Indonesia need rice as staple food. So it can be seen why Indonesia imports rice from other countries just to meet the needs of the people of Indonesia. And one of the countries that often export rice to Indonesia is Thailand

Food Production and Exported-Imported Countries

There are list of what kind of food production which mostly produced and export to other countries, as well as what kind of product that Indonesia mostly imported. As follows:

A. List of Most Exported Countries

Indonesian export products include agricultural products, forest products, fishery products, mining products, industrial products, and services. Here are some of them:

No	Countries	Export Goods
1	England	Tobacco, rubber, palm oil, Tea, coffee
2	Netherlands	Copra, coffee, spices, and Plantation products
3	Belgium / Luxemburg	Rubber, coffee, tobacco, shrimp, pepper White, sawn timber, weaving yarn, garment, plywood
4	Japan	Petroleum, metal ore, Aluminum, wood, foodstuff
5	Amerika	Petroleum and LPG
6	Perancis	Raw materials, perfume industry, Rubber, palm oil
7	Jerman	Rubber, copper, lead, petroleum
8	Thailand	Fresh and frozen fish, urea fertilizer, Steel, apparel, cement, coal, paper, plywood, tobacco, iron
9	Singapura	Crude oil, natural rubber, tin, Plywood, cosmetics, paper, telecom tools, stationery
10	Brunei Darussalam	Cement and building goods, clothing So, minerals processed, flour, cigarettes

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B. List of Most Imported Countries

Below are the countries along with the list of goods that Indonesian are imported. Mainly because the production of below goods isn’t that massive in Indonesia so the government required import to fulfill the needs.

No	Countries	Import Goods
1	Vietnam, Thailand, India, Pakistan, Myanmar	Rice
2	India, Brazil, Argentina, Thailand, Paraguay	Corn
3	USA, Argentina, Malaysia, Paraguay, Uruguay	Soy
4	Thailand, Malaysia, Australia, South Korea, New Zealand	Sugar
5	Thailand, Brazil, Australia, El Salvador, South Africa	Cane sugar
6	Australia, New Zealand, USA, and Singapore	Beef
7	Australia	Cow

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In order to compete on the world trade level, the domestic business world must grow strong. To grow fast is certainly requiring government policies that benefit domestic entrepreneurs. Although free trade means no state borders, favorable policies can still be created on condition that they are not against the laws of world free trade.