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RI seeks legacy at APEC, WTO

Indonesia wants to use the Asia-Pacific Economic Cooperation (APEC) Summit and the World Trade Organization (WTO) Ministerial Meeting that it will host this year to boost its diplomatic stature and reap greater economic gains

Linda Yulisman (The Jakarta Post)
Jakarta
Thu, January 3, 2013

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RI seeks legacy at APEC, WTO

I

ndonesia wants to use the Asia-Pacific Economic Cooperation (APEC) Summit and the World Trade Organization (WTO) Ministerial Meeting that it will host this year to boost its diplomatic stature and reap greater economic gains.

Trade Minister Gita Wirjawan said on Wednesday that Indonesia would use the APEC meeting to propose the inclusion of palm oil and rubber on the list of environmentally friendly goods.

Indonesia is the world’s largest palm oil producer and the second-largest rubber exporter after Thailand, employing millions of people in the upstream and downstream sectors of both industries.

Should APEC members agree to the proposals during the summit, which will be held in October in Bali, the commodities will be exempt from any trade barriers.

“If the commodities are covered and there is also a provision for [green goods] capacity building, that would be a big leap for us,” Gita said.

APEC unites the leaders of 21 Pacific Rim nations that account for 54 percent of the world’s economic output and 44 percent of global trade.

The leaders of APEC forged a historic deal during last year’s summit in Vladivostok, Russia, over a list of green goods. The US-initiated goal to draft the list was first introduced by the WTO in 2001, but to no avail.

During the summit, Indonesia was not able to include palm oil on the list, as many developed nations consider the commodity environmental unfriendly.

However, the US then pledged to help lift barriers on palm oil imports by reviewing its previous findings that the edible oil was not eligible for inclusion in its renewable fuel standard programs because the emission offsets that it produces fell short of the required threshold.

Representatives of the US Environmental Protection Agency (EPA) recently visited Indonesia to make firsthand observations of palm oil management in the nation.

“An expected favorable conclusion by the EPA could serve as a strong basis for the inclusion of palm oil in the extended list that Indonesia would push for,” Gita said.

The Indonesian Palm Oil Producers Association (Gapki) welcomed the government’s attempt to defend the commodity against allegations of environmental harm.

“If passed, there will be improved perception of palm oil that will help avert any barriers to trade,” Gapki executive director Fadhil Hasan said.

The Indonesian Rubber Association (Gapkindo) also praised the proposal, although the representative said it would not greatly affect exports, as the commodity is not subject to import duties by APEC members.

“The promotion of rubber as a green commodity will be an endorsement for it to be included in carbon-trading schemes, as rubber trees generate oxygen and capture water,” Gapkindo assistant director Erwin Tunas said.

Despite vying to accommodate national interests, Gita is also betting on Indonesia’s rising diplomatic influence to pass key policies at the WTO meeting in Bali in December.

“If our success in including palm oil and rubber is complemented by the passing of trade facilitation and access for least-developed countries [LDCs] during the upcoming WTO meeting, it will define Indonesia,” Gita said.

Passage of the trade facilitation deal and of access for LDCs, according to Gita, would lay groundwork for kick-starting the long-deadlocked Doha round negotiations, particularly over subsidies and import duties on industrial goods.

The trade facilitation is aimed at accelerating the flow of goods and services globally by relaxing customs procedures, providing transparency and predictability of trade and lowering business costs.

Indonesia’s strong leadership during the meeting, according to Gita, is expected to bridge the gaps between developed nations, developing nations and the LDCs.

“We seek to endorse the trade facilitation with advanced economies, India and African countries. They are willing to proceed as long as they get concessions,” Gita said.

Indonesia’s impressive economic growth in recent years has helped expand its international influence.

According to McKinsey & Company, Indonesia will overtake Germany and the UK to become the world’s seventh-largest economy by 2030.

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