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Modest trade kept RI below US radar: Former US envoy

Indonesia has largely avoided the tumultuous trade and foreign policies of Donald Trump’s America, thanks in no small part to its modest investments and trade deficit, a former United States envoy to Indonesia has said

Dian Septiari (The Jakarta Post)
Jakarta
Wed, September 19, 2018

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Modest trade kept RI below US radar: Former US envoy

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ndonesia has largely avoided the tumultuous trade and foreign policies of Donald Trump’s America, thanks in no small part to its modest investments and trade deficit, a former United States envoy to Indonesia has said.

Beginning earlier this year, the ongoing trade war has seen China and the US impose sanctions and tariffs against each other, while the US has also imposed tariffs against Canada and the European Union while complicating trade negotiations with Mexico.

US President Trump had acted against some of Washington’s biggest trading partners in an effort to negotiate trade imbalances between the US and several countries, which were identified in a “trade hit list” just months after the mercurial leader came to power in 2017.

“Despite the convulsions that have marked foreign policy in the first two years of the Trump administration, I think US-Indonesia relations have survived largely unscathed thus far, compared to the really dramatic changes we’ve seen in our foreign policy with the European Union, China and many other principle foreign policy partners,” retired US ambassador Robert O. Blake Jr. said in a discussion in Jakarta on Tuesday.

Indonesia ranked 15th on the hit list, with US$13 billion in trade surplus over the US. China was in first with a $347 billion surplus followed by Japan, Germany, Mexico and Ireland, as well as some Southeast Asian countries.

According to data from the Investment Coordinating Board (BKPM), the US invested $1.99 billion in 625 projects in Indonesia last year, an increase from $1.16 billion and 540 projects in 2016. Meanwhile, the Indonesia-US trade value stood at $25.9 billion in 2017.

In addition to its relatively modest trade and investment output, Blake said the current US administration had given priority to Indonesia through a number of visits by high-level officials from early on, helping buffer Indonesia from the chaos in Washington.

US Vice President Mike Pence visited Indonesia in April 2017, not long after Trump’s call to investigate trade imbalances with countries on the hit list. US Defense Secretary James Mattis, who Blake said had been an important advocate for US-Indonesia relations, visited Indonesia earlier this year.

“Mattis has been active behind the scenes to ensure that issues like your purchase of Sukhoi fighters doesn’t become a distraction,” he said, referring to Indonesia’s continued purchase of Russian jet fighters.

Mattis, Blake added, had been trying to insulate Indonesia and a few other countries from US sanctions aimed at preventing countries from trading with Russia’s defense and intelligence sectors.

This comes off the back of a seething anonymous op-ed from within the Trump administration declaring intent to “frustrate his worst inclinations”.

Indonesia’s ties with the US was further cushioned by Trade Minister Enggartiasto Lukita’s forays, which helped alleviate pressure from the agricultural sector and allowed for the exemption of Indonesian steel products from US tariffs.

However, Blake said Indonesia should minimize economic nationalism as it may affect US companies, such as the recent takeover of the Rokan oil and gas field from Chevron and the Grasberg copper and gold mine from Freeport McMoran. (tjs)

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