JAKARTA - Indonesia is sending a trade mission to the United States on Sunday (July 22) to lobby the Trump administration into maintaining favourable trade terms amid increasing global trade tensions triggered by the US.
A key focus of the trip is a regular US review of a preferential tariff scheme called the generalised system of preference (GSP). The review, which occurs every three years, is happening this year and Indonesia is keen for the scheme to remain unchanged.
Indonesia has received considerable tariff cuts under the GSP scheme since 1980 along with Thailand, India and Kazakhstan, among others.
For example, in 2016, the GSP facility led to tariff cuts for US$1.8 billion worth of Indonesian products, according to figures from the Indonesian Chamber of Commerce and Industry (Kadin).
Indonesia has other concerns, too, including increased tariffs on steel and aluminium, while the US might bring up market access issues affecting American products in Indonesia. For now, Jakarta's main aim is to keep the status quo at a time when the US is hitting out at major trading partners China, the EU and others for what it says are unfair trade practices.
Leading the Indonesian mission is Trade Minister Enggartiasto Lukita. He is expected to meet US Trade Representative (USTR) Robert Lighthizer and US Commerce Secretary Wilbur Ross next week.
Mr Enggartiasto said Indonesia and the US have major trading opportunities.
"Our meeting with our counterparts from the USTR and the Department of Commerce is very important to deepen the Indonesian and US strategic partnership that have been laid out by the two countries. It must be managed, preserved and sustained in order to benefit each other," he said in a statement on Sunday.
The delegation also includes representatives from, among others, Kadin, the Indonesian Exporters Association, the Indonesian Importers Association, as well as producers of products such as tyres, palm oil, steel, aluminium and food and beverages.
The team will also attend a business forum and a business matching event engaging Indonesian and American entrepreneurs.
In April last year, the Trump administration issued a list of countries with which it has significant trade deficits and it put Indonesia in 15th position out of 16 countries that include China, Japan, Germany, India, Vietnam, Thailand and Malaysia.
Two-way trade between Indonesia and the US reached US$25.92 billion (S$35.2 billion) in 2017, according to Indonesia's Trade Ministry. Indonesia exported US$17.79 billion worth goods and commodities, while it imported US$8.12 billion, resulting in a surplus of US$9.67 billion.
Indonesia's major exports to the US were shrimp, natural rubber, footwear, tyres and garments, while its main imports were soybean, cotton, wheat flour, corn flour and animal feed.
Kadin deputy chairman for international relations, Ms Shinta Kamdani, expected Indonesian exporters will continue to obtain the GSP facility from the US.
"Basically, we want a win-win solution for both parties. The US needs the products that enjoy the facility and it also does not produce them domestically," she told The Straits Times.
Ms Shinta also noted that Indonesia has improved market access for American manufacturers and investors in line with US concerns.
The Trade Ministry's director general for foreign trade, Oke Nurwan, said recently that the government was optimistic about the result of the upcoming meetings between Indonesia and the US.
"We have changed our [IMPORT]rules, including ones affecting horticulture, as raised by the US," he said.
