Indonesia lobbies US to maintain special tariff treatment

JAKARTA (REUTERS) – Indonesia lobbied visiting US Secretary of State Mike Pompeo to keep the Southeast Asian nation on a list of countries that receive preferential trade terms, its foreign and trade ministers said on Sunday (Aug 5).

“President Joko Widodo has delivered Indonesia’s hope that the US will maintain the country’s GSP (Generalized System of Preferences) facility,” Foreign Minister Retno Marsudi told reporters after meeting Pompeo.

In April, the US Trade Representative’s Office said it was reviewing the eligibility of Indonesia, along with India and Kazakhstan, for the GSP based on concerns over compliance with services and investment criteria.

“Around 53 per cent of the goods covered by the GSP are commodities with links to products the US exports, while 35 per cent are related to the production process of US products,”Marsudi said.

Under the GSP, Indonesia gets reduced tariffs on about US$2 billion (S$2.7 billion) worth of exports to the United States, including some agricultural, textile and timber products, the Indonesia’s employers association told Reuters in July.

Total exports to the United States were US$17.8 billion data in 2017 from Indonesia’s trade ministry showed. Indonesia ran a US$9.7 billion trade surplus with the United States last year.

Indonesian Trade Minister Enggartiasto Lukita said Indonesia has asked the United States to exempt its aluminium and steel products.

The minister said he and Marsudi had met U.S. Commerce Secretary Wilbur Ross in Washington in July and agreed to raise the value of annual US-Indonesia trade to US$50 billion. Lukita said Pompeo had agreed on the need to increase economic ties and increase the countries’ strategic partnership.

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