The European Union will grant a zero tariff rate for an export quota of 1 million metric tons of Indonesian crude palm oil per year when both sides ratify a free trade deal set to be signed soon, an Indonesian minister said on Thursday.

The EU and Indonesia are expected to formally sign the free trade deal in September and ratification is set to follow next year, said Airlangga Hartarto, Indonesia’s economic minister.

The EU will set a quota for Indonesian exports of palm kernel oil at a later date, based on Indonesia’s shipments a year prior, he added.

The EU will impose a 3% tariff for Indonesian crude palm oil exports not covered by the quota, Susiwijono Moegiarso, another economic ministry official, said.

The Southeast Asian country exported around 1.9 million metric tons of crude palm oil to the EU last year, Susiwijono said.

Indonesia and the EU reached a political agreement this month to advance the free trade deal when President Prabowo Subianto met with European Commission President Ursula von der Leyen in Brussels.

The deal has been dubbed the Comprehensive Economic Partnership Agreement (CEPA).
Source: Reuters