US set to boost bilateral trade with Indonesia
JAKARTA (The Straits Times/ANN) - More investment in the works too, says US commerce chief after Jakarta meeting
United States Secretary of Commerce Wilbur Ross yesterday provided an upbeat assessment of economic ties with Indonesia, saying it could expect more US investment and greater bilateral trade.
He said he was encouraged after "very constructive discussions" with the Indonesian government, including on sensitive issues that both sides were trying to resolve.
"I think we will see far more investment from American companies and far more high-level trade than even exists right now," Mr Ross told journalists after meeting a number of Indonesian ministers and officials led by Coordinating Minister for Economic Affairs Airlangga Hartarto.
Mr Ross was visiting Indonesia as part of a swing through South-east Asia, accompanied by a high-level business delegation including executives from American companies such as Honeywell, Magnolia LNG, Citi and Qualcomm. Earlier this week, he was in Thailand to take part in the Asean-US Summit as well as the Indo-Pacific Business Forum. He heads to Vietnam today.
Mr Ross, a former banker, described his visit to the region as a sign of sustained US interest in South-east Asia, its "largest single regional trading partner".
He said the US concurred with Indonesia that there should be "very intense negotiations" to tackle a few issues.
"We are comfortable and confident that very quickly, they could be resolved," Mr Ross said. He did not elaborate on a timeframe.
The extension of tariff cuts for Indonesian goods under the US generalised system of preferences (GSP) scheme would be among the issues to be resolved. The US Trade Representative's Office had said in April that it was reviewing the eligibility of Indonesia, along with India and Kazakhstan, for the GSP based on concerns over compliance with the services and investment criterion.
Mr Iman Pambagyo, director-general for international trade negotiations at Indonesia's Trade Ministry, said the Trump administration has raised some concerns pertaining to Indonesian rules on electronic systems and transactions, insurance and re-insurance, and divestment, among other things.
Since 1980, Indonesia, the largest economy in South-east Asia, has benefited from lower duties under the GSP scheme. In 2017, tariffs on US$1.9 billion (S$2.6 billion) worth of Indonesian products were slashed under the scheme.
Ms Shinta Kamdani, deputy chairman for international relations at the Indonesian Chamber of Commerce and Industry, said yesterday that only 10 per cent to 15 per cent of Indonesian exports to the US enjoyed the preferential facilities.
Bilateral trade between Indonesia and the US reached US$28.6 billion last year. Jakarta enjoyed a surplus of US$8.2 billion in bilateral trade. US foreign direct investment into Indonesia was $11.1 billion last year, down 26.6 per cent from the previous year, according to official US figures.
Both countries agreed last year to lay out a road map to boost two-way trade to US$50 billion in the next few years.
Speaking after yesterday's meeting, Mr Airlangga said the Indonesian government would facilitate US investment, including by easing restrictions on capital and business partnerships. "The government promises that it will fix the rules and put them into an omnibus law within three months," he said.