Exports of Indonesian soap products are ready to revive in the Madagascar market. This is because the Madagascar Government has finally stopped the investigation of safeguards for Indonesian soap products after being delayed for more than a year due to the COVID-19 pandemic. This decision is contained in the circulation of the Madagascar Notification released on the World Trade Organization (WTO) website on 3 May 2022. "It is believed that this good news can be an impetus for Indonesian soap producers to re-enter the Madagascar market after being threatened with imposing Safeguard Measures (BMTP)," said Trade Minister Muhammad Lutfi in a press release, quoted on Sunday, June 12, 2022.
According to him, soap products from Indonesia are considered to have the potential to disrupt the performance of similar product industries because they have competitive quality with a comprehensive reach in Madagascar. "However, the decision to release the BMTP was finally taken and this is certainly good news for Indonesian exporters to become more competitive in the Madagascar market, especially as an effort to recover the national economy during the COVID-19 pandemic," he said. Previously, the Madagascar Government initiated an investigation into soap product safeguards to all countries, including Indonesia on August 14, 2019. Then on September 14, 2020, the Madagascar Investigation Authority (ANMCC) recommended the application of safeguard measures to soap noodle products from Indonesia with a quota of 6.5 thousand tons per year.
Products that exceed the quota will be subject to an additional import duty of 34 percent with a decrease of two percent every year until the fourth year. The additional import duty will also be applied to the import of finished soap products. However, the Madagascar Government finally decided not to apply safeguard measures even though ANMCC was of the view that the soap product industry in Madagascar had suffered material losses due to imports of similar products. Plt. The Director General of Foreign Trade at the Ministry of Trade, Veri Anggrijono, said that the Ministry of Trade made various efforts to anticipate the Madagascar Government's decision. This includes consultations and informal communication with Madagascar. "This success cannot be separated from the cooperation between Indonesian government agencies and business actors. Proactive steps to respond to this investigation should be imitated for handling other cases," added Veri. Director of Trade Security Natan Kambuno added that recently, trade remedies instruments were increasingly being used by Indonesia's trading partners, especially to protect their industries. "It is hoped that this positive result can restore the export performance of Indonesian soap products which had been disrupted to Madagascar," he concluded. The Statistics Indonesia (BPS) noted that in the January-March 2022 period, the export value of soap with HS codes 340111, 340119, 340120, and 340130 to Madagascar posted a figure of USD1.1 million. This value decreased by 46.5 percent compared to the same period the previous year. Meanwhile, in 2021, the value of Indonesian soap exports to Madagascar will reach USD 13.4 million.
