The agreement of Indonesia and China to lift import duty respectively on chili powder and cocoa will take effect on Jan 1, 2007, Indonesian trade Minister Mari Elka Pangestu said here Wednesday.

The removal of the import duty was agreed upon in the Memorandum of Understanding signed by Pangestu, and her Chinese counterpart, Bo Xilai, during the meeting of the Joint Commission on Economic, Trade and Technical Cooperation between Indonesia and China in Nusa Dua, Bali on October 6.

According to the agreement, Indonesia will reduce import tariff on chili powder from China from ten percent to zero percent, and China will decrease the tariff on cocoa from Indonesia from 15 percent to zero percent.

Separately, Director General of International Trade Cooperation of the Trade Minister Herry Soetanto also confirmed that the policy will kick off in January next year.

Indonesia is the world's third largest cocoa producing country after the Ivory Coast and Ghana in Africa. The value of Indonesian cocoa exports to China increased from 10.9 million U.S. dollars in 2004 to 16 million U.S. dollars in 2005.

Source: Xinhua