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US seeks to sell more soybeans to RI

A United States trade mission seeks to increase exports of key agricultural products to Indonesia, although its leader denies it has anything to do with an unfurling US trade war with China

Dian Septiari (The Jakarta Post)
Jakarta
Thu, July 19, 2018

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US seeks to sell more soybeans to RI

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United States trade mission seeks to increase exports of key agricultural products to Indonesia, although its leader denies it has anything to do with an unfurling US trade war with China.

US Department of Agriculture (USDA) undersecretary for trade and foreign agricultural affairs, Ted McKinney, is currently in Jakarta leading a trade mission seeking to “expand agricultural export opportunities” in Southeast Asia by meeting Indonesian buyers — already some of the biggest buyers of US commodities such as cotton and soybeans.

Since Monday, McKinney has led a delegation of 20 US-based companies and commodity groups, including the US Soybean Export Council, which has been meeting buyers throughout Asia and Europe, and the National Cotton Council, to meet some 200 Indonesian businesses from the agricultural sector.

“Those [business match-ups] may not result in a sale but it doesn’t have to — [we are] just getting to know each other,” McKinney said on Wednesday.

As part of his delegation’s itinerary, McKinney is to bring the mission to see one of 100,000 facilities manufacturing tempe – a popular local dish made of soybeans — so US traders could “appreciate the purchase of US soybeans by Indonesian companies.

“They have found a consistency and a quality [so] they want to purchase US soybeans and we are very pleased with that,” he said.

The US trade mission comes while the Indonesian trade minister is scrapping plans to bring back an import tax on soybeans and just ahead of a meeting to persuade US officials to keep Indonesia on a list of countries that receive preferential trade terms.

Indonesia, which buys 98 percent of its soybeans from the US to churn out foods like tofu and tempe, removed the import tax in 2013 to quell rising food price inflation. However, the agriculture ministry had been quoted by media in the past few years as requesting a reimposition of the tax to help boost prices of the commodity for local farmers.

“Tofu and tempe use soybeans from [the US] and they are hard to replace, so we can’t put up a tariff as a barrier,” said Enggartiasto Lukita, Indonesia’s trade minister, as quoted by Reuters.

That comes as Indonesian delegates are due to meet this month with the US Trade Representative (USTR) after that body announced in April it was reviewing this country’s eligibility for the Generalized System of Preferences (GSP) — a US program for applying reduced import tariffs on products sold by poor and developing nations.

The USTR said at the time that the review was undertaken because Indonesia had implemented a wide array of trade and investment barriers that had hurt US commerce.

Under the GSP, Indonesia gets reduced tariffs on about US$2 billion worth of its exports to the US, including some agricultural, textile and timber products. Indonesia’s total exports to the US were worth $17.8 billion last year, trade ministry data showed. Indonesia imported about 2.4 million tons of soybeans from 2016 to 2017, according to the US International Trade Administration.

The US delegation’s trip across Asia coincides with the start of a trade war between the US and China, with Beijing enacting retaliatory tariffs on US soybeans.However, McKinney said this week’s mission was not related to the US effort to find alternative markets as several countries imposed tariffs against US products.

“The planned visit to Indonesia occurred long before any tariffs came along, [...] I don’t think there’s any equation, any relationship between coming here as a result of tariffs and trade disputes,” he said. “We came here because [...] there’s an opportunity for good successful two-way trade completely separate from any trade disputes.”

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