Indonesia has emphasized its trade policy with the United States will not only benefit Southeast Asia’s largest economy, but was also aimed at achieving a win-win solution in the long run
ndonesia has emphasized its trade policy with the United States will not only benefit Southeast Asia’s largest economy, but was also aimed at achieving a win-win solution in the long run.
“We will boost [bilateral] trade. That means we will not only aim to increase exports but also boost the import of goods that we are in need of,” Trade Minister Enggartiasto Lukita said after a luncheon meeting with a number of US industry players in Washington DC on Monday local time.
For example, the minister said, Indonesia would increase imports of cotton from the US amid the ongoing trade tension.
He said the trade war would potentially reduce the volume of US cotton exports to China, therefore resulting in oversupply.
Enggartiasto said Indonesia would increase its cotton imports from the US as much as it could to help absorb US cotton output. Meanwhile, Indonesia would also export its garment products to the US.
Indonesia is the world’s fifth-largest cotton importer at US$2.1 billion in 2017.
“We will discuss this with the US. We will convince them that our policy will cater to the interests of both Indonesia and the US,” the minister said, referring to his upcoming meetings with US Trade Representative (USTR) Ambassador Robert E. Lighthizer and US Secretary of Commerce Wilbur Ross later this week.
“We will work to find [ways] to increase bilateral trade,” he added.
The minister assured Washington DC his trade mission this week would not increase the US’ trade deficit with Indonesia — which has been the main concern of US President Donald Trump — but rather seek a mutually beneficial solution.
In 2017, the US saw a $14 billion trade deficit with Indonesia.
As part of the effort to lower the US trade deficit, President Trump in March imposed a 25 percent import duty on steel and 10 percent on aluminum to protect its manufacturing industry.
The US is also reviewing the generalized system of preferences (GSP) for Indonesia and several other countries.
Minister Enggartiasto is in Washington this week to talk with his counterparts to boost trade and to have consultations regarding the GSP review and the US tariffs on aluminum and steel.
Meanwhile, during the luncheon meeting, most US industry representatives expressed their support for Indonesia, saying that US tariffs on Indonesian goods would not only affect Southeast Asia’s largest economy but also hurt American businesses.
In addition, US importers expected that the US government would maintain the GSP facility for Indonesia to ensure the competitiveness of Indonesian products.
Daniel Anthony from the GSP Coalition, a US organization campaigning for the GSP to be maintained, said if the GSP were to be suspended, it would lead to a cost increase for US manufacturers.
“The impact [of a GSP suspension] would be so negative for our members at a time when they are growing,” Anthony said.
As part of its support for the GSP, Daniel said, his organization has participated in some actions, such as submitting its comments on the GSP to the US government, attending hearings with senators and conducting surveys on US companies.
Dave Thoman, president of Leading Edge, a supplier for the window manufacturing industry, said he hoped Indonesian aluminum and steel products would get tax waivers from the US authority.
Indonesian Ambassador to the US Budi Bowoleksono, meanwhile, said the GSP scheme did not only benefit Indonesia but also had a positive impact on the US manufacturing industry.
“I hope US importers will also advocate the Indonesian government’s campaign for the GSP,” he said.
Meanwhile, during his meeting with The Boeing Company on Monday earlier the same day, Minister Enggartiasto said he asked the US aircraft maker for a strategic partnership in the production of bioavtur to help reduce emissions.
The trade minister said he also asked Boeing to establish an office in Jakarta and to invest in a maintenance facility in Indonesia.
“Basically, Boeing gave a positive response [to our request],” Enggartiasto said.
In 2012, the purchase of Boeing aircraft by Lion Air was the biggest purchase in the history of Boeing with a deal worth $22.4 billion.
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