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EDITORIAL: Trump's trade hit list
Indonesia’s US$13 billion trade surplus with the US does not breach international trade rules as Indonesia exports only commodities and manufactured goods that the US, as the world’s largest economy, needs.
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In this Wednesday, March 15, 2017 photo, a man stands near a magazine advertisement featuring US President Donald Trump at a news stand in Shanghai, China. (Chinatopix via AP/File)
E
ven though the rules of the Geneva-based World Trade Organization (WTO) restrict what the United States can do to retaliate against its trading partners with big surpluses, Indonesia should be alert and thoroughly reexamine the composition of its exports to ensure that none of its export goods violate WTO rules, notably those on anti-dumping.
As Indonesia has been included on the US trade hit list of 16 so-called offending trading partners with big surpluses with the US, its exports will be subject to unusually tight scrutiny by US trade and customs officials and even the slightest indication of dumping, which is classified as disruptive toward US domestic production, could result in harsh countervailing duties being levied by the American government.
True, as chief economics minister Darmin Nasution noted on Monday, Indonesia’s US$13 billion trade surplus with the US does not breach international trade rules as Indonesia exports only commodities and manufactured goods that the US, as the world’s largest economy, needs.
But since the US Biodiesel Board has filed a petition with the Department of Commerce and International Trade Commission to impose anti-dumping and countervailing duties on biodiesel imports from Indonesia, other Indonesian export commodities could end up in the spotlight of the US customs and trade officials, especially as Indonesian biodiesel exports to Europe have been subject to countervailing duties in Europe.
The government also should see to it that the rupiah exchange rate is not kept artificially low in a bid to achieve an unfair trade advantage with the US, because a weak currency is also an important factor in bilateral trade balance. In fact, the accusation of currency rate manipulation by China has long been one of the contentious issues in its trade relations with the US.
We still believe that despite the rising tide of populism and nationalism in the developed countries over the past two years, free trade is still overwhelmingly believed to increase productivity and overall economic welfare, both in developed economies and emerging economies. Hence, we are confident that the consensus policy will remain opposed to the erection of barriers to trade and international capital movements. Nevertheless, there seems to be increasingly strong public opinion that these process can only be defended politically if the losers are compensated by the winners.
The US, thus far seen as the custodian of global trade, risks derailing the global economy and causing turmoil if the US Congress allows President Donald Trump to disregard the WTO rules and other international trade regulations as a strong, rule-oriented multilateral framework is most vital to generate optimum benefits of global economic integration.
