US and Indonesia seek to cut trade and investment barriers
JAKARTA: Indonesia and the United States agreed on Friday to find ways to reduce barriers to US companies operating in Southeast Asia’s largest economy, visiting US Vice-President Mike Pence and Jakarta’s investment chief said.
The Trump administration has put Indonesia on a list of 16 countries whose trade surpluses with the United States will be put under review. A series of disputes between Indonesia and American firms has also ruffled ties.
“We will work with President Jokowi to reduce barriers to trade and investments and to create a truly level playing field where all our businesses have equal opportunity and market access,” Pence said. Jokowi is the nickname of Indonesia’s President Joko Widodo.
“The president and I spoke about that very candidly and very respectfully,” Pence told a roundtable discussion with business executives in Jakarta before flying to Australia on the last leg of his 10-day Asia-Pacific tour.
Indonesia’s investments barriers include a lack of intellectual property protection, insufficient transparency with regulations and requiring local content for manufactured goods sold in the Indonesian market, Pence said.
Indonesia’s Investment Coordinating Board chief Tom Lembong said Widodo agreed “we still have too many regulations, too many barriers to trade, and these are bad for local and international industries”.
“I’m optimistic because President Jokowi and President Trump are both lifelong business people, and I think they are very focused on the practical issues that hinder business and investment,” Lembong said. “I feel that the Trump administration and the Jokowi administration are on the same wavelength.” Lembong said Indonesia needs both investment and imports from the United States, “especially productivity-enhancing products and services. You need imports to boost exports.”
$10 BILLION AGREEMENTS: Neither side disclosed any discussions about the disputes Indonesia has had with American companies of late.
Over the past six months, Indonesia has wrestled with mining giant Freeport McMoRan, demanding the company divest 51 per cent of its shares in its Papua-based gold and copper mine, and has demanded that Google Inc settle unpaid taxes and fines of more than $400 million. Jakarta also scrubbed JP Morgan from its list of primary bond dealers after what was deemed a negative research report.
Pence did, however, witness the signing of more than $10 billion in memoranda of understanding with US companies in Indonesia on Friday.
Among the 11 agreements were ones by Exxon Mobil to sell liquefied natural gas to Pertamina, Lockheed Martin to provide upgrades to the Indonesian Air Force’s F-16s, and General Electric to develop electrical infrastructure in Indonesia.
“We think there are opportunities to clear open the way for American companies to participate more greatly in Indonesia,” Pence said, adding the agreements would “draw our nations closer together and benefit both our people.” — Reuters