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RI seeks greater access to US market
President Joko “Jokowi” Widodo’s administration has asked a visiting United States official for greater access to the latter’s market as both countries expect to finalize a trade preference facility review before Christmas
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President Joko “Jokowi” Widodo’s administration has asked a visiting United States official for greater access to the latter’s market as both countries expect to finalize a trade preference facility review before Christmas.
Coordinating Economic Minister Airlangga Hartarto said the government had conveyed the aspiration to have greater access for Indonesian furniture and textile products during a discussion between President Joko “Jokowi” Widodo and US Secretary of Commerce Wilbur Ross at the State Palace, Jakarta, on Wednesday.
In return, Indonesia will increase its wheat and cotton purchases from the US.
“Wilbur Ross said that once the Generalized System of Preferences [GSP] review was already completed, we could talk about additional [trade agreements],” Airlangga said.
The Office of the US Trade Representative (USTR) has been reviewing Indonesia’s eligibility for receiving the GSP facility for more than one year. The facility gives privilege to developing economies to export their products to the US with lower or zero duties.
Washington has decided to review Indonesia’s eligibility along with those of other countries due to the wide trade surplus the latter has constantly booked against the former.
During the talks with Ross, the government strongly pushed Ross to complete the review before the end of this year, Airlangga said.
“We will send our delegations [to the US] in December so that it can be concluded before Christmas,” he said at the palace.
In a meeting with Airlangga, which was held prior to his talks with Jokowi, Ross said his delegation had “very constructive discussions” on GSP, adding that he was confident that any sticking points would be solved soon.
“We are comfortable and confident that very quickly that [outstanding issues] could be solved," said Ross.
“I think we’ll see far more investment from American companies and far more bilateral trade than exists right now,” he added.
The secretary, who is known for his hawkish stance toward China, also emphasized the strategic importance of the Southeast Asia region to the US, saying that his country conducted “about twice as much bilateral trade volume” with the region compared to Europe or South and Central America.
“We are very much present out here and any thought that we are losing interest in this region is totally wrong,” said Ross.
US President Donald Trump has been accused of leaving his Asia-Pacific allies by pulling out of the Trans-Pacific Partnership (TPP) shortly after he took office. Meanwhile, China, with whom the US is currently embroiled in a trade war, pushes its influence through various investment and infrastructure projects.
Earlier this week, the US did not send its most senior officials to the ASEAN Summit and only dispatched Ross and national security adviser Robert O’Brien, forcing several ASEAN leaders to snub a meeting with the US
officials.
Jokowi on Tuesday insisted that ASEAN’s development road map should dovetail with China’s Belt and Road Initiative (BRI), saying “collaboration to build connectivity and infrastructure between ASEAN and China is urgently needed.”
Indonesia wanted to double its annual two-way trade with the US to around US$60 billion.
Despite the country's concerted attempt to secure the GSP facility, only about 9 percent of its exports actually enjoyed the facility, said Yose Rizal Damuri, head of the economic department of Jakarta-based think-tank Centre for Strategic and International Studies (CSIS).
He emphasized, however, that securing the facility was vital for Indonesia’s interest to avoid being put on the US’ watchlist and suffering the same fate as China by having higher tariffs imposed.
Indonesian Chamber of Commerce and Industry (KADIN) deputy chairwoman Shinta Kamdani voiced a similar view.
“The GSP facility actually does not significantly affect our trade value to the US or to the global market,” said Shinta.
“But it gives us good leverage to increase our exports against our competitors that do not enjoy a similar benefit such as India, Malaysia and Turkey. So, it is very relevant for us to maintain [the GSP].”
