ASEAN Food Safety Pact Poised to Significantly Boost Indonesia's Food Trade Balance

Trade Minister Budi Santoso stated that the ratification of the ASEAN Food Safety Regulatory Framework Agreement (AFSRFA) has the potential to increase Indonesia's trade balance in the food sector by up to US$634.83 million. This initiative aims to facilitate trade and investment flows within the ASEAN region through the harmonization of food safety standards. According to the minister, the agreement is also projected to increase national welfare by US$252.17 million. A study by the Ministry of Trade suggests that the AFSRFA will encourage increased investment flows into the food sector by reducing compliance costs, stabilizing domestic food prices, and enhancing the purchasing power of the Indonesian people. Commodities expected to see export growth include agricultural products, vegetable oils and fats, and other processed food items. The AFSRFA is an agreement that governs technical aspects and cooperation in the implementation of the ASEAN Food Safety Policy (AFSP). Its primary objectives are to enhance consumer health protection and promote safe food trade in the ASEAN region by harmonizing regulations and eliminating technical barriers. The scope of the agreement encompasses arrangements for requirements, processes, and coordination mechanisms for implementing food safety standards along the food supply chain throughout the ASEAN region. The harmonization of regulations is expected to provide certainty for business actors, enabling them to reduce compliance costs and strengthen the competitiveness of Indonesian food products in the regional market. To ensure the optimal implementation of the agreement, the government is preparing several mitigation steps. These include drafting and harmonizing laws and regulations, developing an automated Certificate of Origin (SKA) system for exporters to utilize preferential tariff facilities, strengthening trade security instruments to protect domestic industries, increasing socialization to stakeholders to maximize the agreement's benefits, and accelerating the digitization of food security systems based on traceability to support Indonesia's integration into the ASEAN food trade network.