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US extends trade privileges for Indonesia amid regional rivalry
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Indonesian President Joko "Jokowi" Widodo gestures during a meeting with US Secretary of State Mike Pompeo at the Presidential Palace in Bogor, Indonesia, on Thursday. ( CourtesyIndonesian Presidential Palace/Muchlis Jr)
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n a move that appears to be aimed at pushing its Indo-Pacific campaign forward and alienating China from other Asian countries, the United States has extended preferential trade terms for Indonesia.
Following the visit of US Secretary of State Mike Pompeo to Jakarta last week, the country has officially extended Indonesia’s Generalized System of Preferences (GSP) status, which eliminates tariffs on thousands of goods traded between the two countries.
The move comes after the Trump administration had considered ending the GSP status for Indonesia.
Indo-Pacific refers to the region straddling the Indian and Pacific oceans, where countries like Japan, Australia and India, together with the US, have published their respective Indo-Pacific strategies to counterweigh China.
Rooted in its free and active foreign policy principle, Indonesia has been adamant in ensuring that the region remains neutral amid the power struggle between the US and China. The GSP status extension, however, reflects the two countries’ shared interest in improving their trade partnership.
Foreign Minister Retno Marsudi said the US government, through the United States Trade Representative (USTR), officially issued a decision on Friday to extend the GSP facility to Indonesia.
She said the decision was a concrete form of strategic partnership between Indonesia and the US, and that the two countries sought “a more comprehensive and permanent” trade partnership, signaling a possible bilateral trade agreement with the US.
