International Trade: The Basis of Export and Import in Indonesia 

By: Thessalonica Rotinsulu, S.H.

Hi readers!

Good to see you here.

“Peace, commerce, and honest friendship with all nations, entangling alliances with none”. – Thomas Jefferson

The Indonesian people have been familiar with the international trade system since the arrival of traders from Arabia, India, and China to various regions in the archipelago. Since the days of the Hindu-Buddhist kingdoms ruling throughout the archipelago, Indonesia has implemented an export and import system for their needs. The development of the trading system grew until the discovery of the silk route. The discovery of this international trade route made foreign traders fill the ports in the archipelago.

International trade is trade carried out by residents of a country with residents of other countries based on a mutual agreement. In international trade activities, there are export and import activities. The definition of export according to the decision of the Minister of trade and industry number 182/MPP/KEP/4/1998 concerning general provisions in the field of export, export is the activity of removing goods and services from the customs area of a country. 

The customs area itself is defined as the territory of the Republic of Indonesia which includes land, water, and air areas, as well as certain places in the exclusive economic zone and the continental shelf in which Law no. 10 of 1995 concerning Customs. The definition of export is all shipments of merchandise abroad through ports throughout the territory of the Republic of Indonesia, both commercial and non-commercial in nature. Government Regulation no. 10 of 2021, export is an activity of removing goods from the customs area.

According to the Big Indonesian Dictionary or “Kamus Besar Bahasa Indonesia”, import is the entry of goods and so on from abroad. Law 10/1995, import is the activity of entering goods into the customs area. Import is an economic activity by bringing goods from outside the region into the region. PP 10/2021, import is an activity of entering goods into the customs area.

Import activities on the one hand are needed by a country to meet its needs, but on the other hand, they can be detrimental to the development of the domestic industry. In order not to harm domestic products, an import policy is needed to protect domestic products (protection).

Trade organizations on an international structure:

1. The World Trade Organization (WTO) is a forum for trade negotiations between countries, reviewing the trade policies of member countries, and working with the World Bank and the International Monetary Fund in a more integrated effort to produce world trade policies.
2. The International Chamber of Commerce (ICC) is an international-level organization in the form of an international non-governmental body that specifically formulates various international policies and agreements in the field of international trade.
3. The International Development Association (IDA) is an international financial organization that is a group of the World Bank and is affiliated with it. The IDA was created to provide interest-free credit on conditions to low-income developing countries to promote economic development.
4. The International Anticounterfeiting Coalition (IACC) is a non-profit international organization engaged in the protection of intellectual property rights such as the development of laws and regulations, violations of laws, and others.
5. The International Maritime Organization (IMO) is an international maritime organization founded in 1948. The agreements stipulated by IMO affect provisions in the field of maritime affairs and international trade shipping traffic.
6. The International Trade Center (ITC) is an organization that aims to accommodate requests from developing countries in establishing and developing export programs. Functionally, ITC provides information and facilities related to export promotion and marketing techniques for developing countries.
7. The International Trade Organization (ITO) is an international organization related to international trade which aims to reduce barriers to international trade and encourage world economic growth.
8. The Organization for Economic Cooperation and Development (OECD) is an international organization formed based on the Paris Convention in 1960 which aims to enhance cooperation and promotion in the economic field, formulate and coordinate assistance provided by member countries to developing countries, including making contributions in increasing world trade.

Single Window is a facility that allows parties involved in trade and transport to lodge standardized information and documents with a single-entry point to fulfill all import, export, and transit-related regulatory requirements. If information is electronic, then individual data elements should only be submitted once.

The National Single Window (NSW) is a system that enables:

1. A single submission of data and information
2. Single and synchronous processing of data and information
3. Single decision-making for customs release and clearance of cargo.

The Indonesian National Single Window (INSW) processes data and information singly to make it easier for exporters and importers to send related documents. The INSW system is carried out online and integrated with government agencies regarding permits for export and import activities. The process of issuing goods and permitting documents can guarantee the security of data and information.

INSW functions, as below:

1. Provision of facilities for submitting, processing, and submitting single decisions, in handling customs documents, quarantine documents, licensing documents, port/airport documents, and other documents related to exports and imports.
2. Preparation of technical support through SINSW to improve trade facilities, monitor the flow of goods, and optimize state revenues, related to exports and imports.

Registration phases:

1. Fill out the registration at https://reg.insw.go.id
2. After filling in the data, download the approval document by providing a stamp and signing it
3. Create an appointment letter as the admin of the INSW portal for one of the company’s employees
4. Send the documents contained in points 2 and 3 via email to [email protected]
5. The LNSW team will process the documents that have been sent and after that, the system will send an email to the registered admin containing the INSW portal user and password. However, if there is a shortage of data, a notification will be provided via email to the applicant.

In summary, Indonesian people are familiar with the export and import system in the trade process since the arrival of traders from Arab, India, and China to various regions in the archipelago. Export is one of the economic sectors that play an important role and through a market expansion the industrial sector will encourage other industrial sectors and the economy, so exports are a source of foreign exchange plus market expansion for the production of domestic goods and expansion of the workforce. Import is the activity of entering goods from a country abroad into the customs area (domestic). INSW is a system that helps exporters and importers to make it easier to manage documents for goods being exported or imported.

Will see you in the next article!

Reference:

Bernardus Wishman Siregar. Perdagangan International. Jakarta: Modul Ekonomi Makro. 2020

https://stie-igi.ac.id/wp-content/uploads/2020/05/WISHMAN-SIREGAR-MODUL-PERTEMUAN-8-EKONOMI-MAKRO-SENIN-4-MEI-2020-OK-1.pdf

Desy Rahmawati Aziz. “Mengenal Organisasi Perdagangan Tingkat Internasional”. Ekonomi dan Perdagangan. 2018. https://bahasan.id/mengenal-organisasi-perdagangan-tingkat-internasional/

“Apa Saja yang Harus Dilakukan atau Dipenuhi Pada Saat Registrasi Portal atau Registrasi User INSW?”. Kemenkeupedia. 2020. https://kemenkeupedia.kemenkeu.go.id/search/konten/6794-apa-saja-yang-harus-dilakukan-atau-dipenuhi-pada-saat-registrasi-portal-atau-registrasi-user-insw

“Peran LNSW dalam Membangun Kolaborasi Sistem Logistik Domestic antara Sektor Pemerintah dan Swasta”. Kementerian Keuangan Lembaga National Single Window.2020.https://aptrindo.or.id/assets/uploads/Peran_LNSW_dalam_Membangun_
Kolaborasi_Sistem_Logistik_Domestik_Antara_Sektor_Pemerintah_dan_Swasta.pdf

Sistem Ekspor-Impor Tradisional di Wilayah Nusantara Hingga Abad ke-19. Potongan Nostalgia. Kumparan. 2018. https://kumparan.com/potongan-nostalgia/sistem-eskpor-impor-tradisional-di-wilayah-nusantara-hingga-abad-ke-19/full. 

Image source: pixabay.com

Editor: Bambang Sukoco, S.H.