US eyes business deals with Indonesia

Palm oil fruit--one of Indonesia's main products.

The United States is looking to ink concrete business deals with Indonesia as part of its efforts to reduce trade deficit with Asian countries.

“We’re not looking for a flashy agreement that does not amount to anything. We’re looking for concrete business deals,” US Ambassador to Indonesia Joseph Donovan Jr. told the media on Tuesday.

“This is a wonderful opportunity for US businesses … to show their commitment to engaging with [the Indonesian private sector] and also to explore with their counterparts here deals that they can make in the future,” he added.

A high-level US business delegation led by US Commerce Secretary Wilbur Ross is set in Indonesia this week that will bring around up to 20 business executives.

Ross’ visit to Indonesia followed the recently-concluded Association of Southeast Asian Nation (ASEAN) summit in Thailand.

Indonesia has consistently recorded a trade surplus with the US. Last year, Indonesia’s surplus totaled to $8.26 billion, slightly lower than the $9.67 billion it recorded in full year 2017.

Indonesia has also been enjoying the US’ Generalized System of Preferences (GSP) system, which allowed for lower duties of up to zero percent on about $2 billion Indonesian goods.

For Indonesia to keep its GSP status, the country has had to make concessions including tightening supervision of property right laws for American products.

Apart from the US, Indonesia is also seeking to expedite trade talks with the European Union (EU) and 15 other countries it has trade deals with.

Indonesian President Joko Widodo said earlier that he had set a target for the vice minister to complete negotiations with the EU and up to 15 countries with whom Indonesia has trade deals with.

Indonesia has since 2016 been looking at sealing a free trade and investment agreement with the European Union. However, relations became dented by the European Commission’s decision to phase out palm oil from transport fuel by 2030 and the imposition of anti-subsidy duties on Indonesia’s biodiesel exports.

Last year, the US said it was reviewing the GSP eligibility of Indonesia, India and Kazakhstan, based on concerns over compliance with services and investment criteria. The GSP facility for India was revoked in June.

Getting the GSP eligibility extended “could have a massive impact which could double the size of our trade with the US,” according to vice foreign minister Mahendra Siregar, who was assigned to conduct economic diplomacy for Indonesia.