Indonesia has finalised a trade agreement with the US which allows market access of American beef into the country, which is also the world’s largest halal protein market.
Indonesia will eliminate tariff barriers on more than 99% of US exports, including agricultural products, while committing to purchase billions of dollars’ worth of American goods. In exchange, the US will maintain a 19% tariff on most Indonesian imports, down from 32% previously.
For the US beef industry, this signifies duty-free access for boxed beef into Indonesia, a market where American product has historically faced substantial tariff and non-tariff hurdles. According to the National Cattlemen’s Beef Association (NCBA), Indonesia has committed to purchase at least 50,000 metric tonnes of US beef annually.
The deal also includes Indonesian recognition of US Department of Agriculture (USDA) authority on food safety and animal health, a move expected to streamline market entry.
NCBA president Gene Copenhaver said, “US beef exports to Indonesia have faced numerous tariff and non-tariff trade barriers. With this agreement, American cattle producers now have access to the 4th most populous country, the largest halal beef market in the world, and more opportunities for producer profitability.”
This represents good news for the US beef industry as US cattle producers now have more market access with Indonesia and recently Taiwan signing a similar trade deal.
Indonesia has also agreed to lift or ease a wide range of non-tariff barriers affecting US agriculture, including removing import licensing requirements on food and farm products and improving transparency around geographical indications covering meats and cheeses.
However, entrance into Indonesian market is not without caveats. Indonesia requires all US products entering its market to obtain halal certification, reaffirming that reciprocal cooperation agreements do not override national regulations, according to statement issued by the Halal Product Assurance Agency (BPJPH). BPJPH Head Ahmad Haikal Hasan said, “Reciprocal cooperation with the US does not eliminate the obligation for halal certification and labeling for imported products sold in Indonesia under the prevailing laws.” In addition, non-halal products are exempt from certification but must clearly display non-halal labelling.
Meanwhile, the Mutual Recognition Agreement allows BPJPH to recognize certificates issued by foreign halal bodies that have passed strict assessments, simplifying procedures without abolishing certification requirements. Currently, 5 US-based halal institutions are recognized by BPJPH and they include the Islamic Food and Nutrition Council of America, American Halal Foundation, Islamic Services of America, Halal Transactions Inc., and the Islamic Society of Washington Area’s Halal Certification Department.
