Indonesia Targets Trade with U.S Rises to US$50B in Two Years

Foreign Minister Retno Marsudi dan Trade Minister Enggartiasto Lukita give a statement on President Joko Widodo and U.S's Secretary of State Mike Pompeo at Merdeka Palace on Sunday (05/08) - Photo by TheInsiderStories

JAKARTA (TheInsiderStories) – Trade Minister Enggartiasto Lukita convey the Indonesian government is targeting the value of trade with the United States (U.S) could reach US$50 billion in the next two years. Currently, the value trade between the two countries worth of $28 billion, of which Indonesia enjoyed a surplus of around 50 percent.

“Currently, the value of trade is too small and the two sides agreed to increase to $50 billion, with each of us draw up a roadmap for then we sit back to reach that value,” the minister told the media after accompanying President Joko Widodo with US Secretary of State Mike Pompeo at the State palace on Sunday (5/8).

Enggartiasto just concluded his visit to the U.S last week and has submitted this plan during a meeting with Secretary of Commerce Wilbur Ross, Secretary of the United States Trade Representative (USTR), Ambassador Robert E. Lighthizer and other related parties in Washington DC, USA.

In a meeting with USTR, trade minister discuss efforts to increase trade and reduction of trade barriers between the two countries. Lukita said that Indonesia has an opportunity to escalate the country’s exports to the U.S market.

On the other hand, he continued, Indonesia is ready to purchase raw materials and capital goods from U.S which is not produced in Indonesia to support the local industry.

During the meeting, the minister also explained to Lighthizer about related issues on the trade barriers for the country’s products. These issues include the review of Indonesia as a recipient country systems generalized scheme of preferences (GSP) and the exception for Indonesia on the imposition of the tariff increase imports of U.S steel and aluminum.

“Demand to maintain the GSP scheme for Indonesia not only for industrial purposes in Indonesia, but also for industrial purposes in the U.S because of their related domestic production process, so this is actually a mutually beneficial,” said the minister.

He added, that Indonesia still need the GSP to boost the competitiveness of products in the U.S market. According to him, Indonesia who have been using the U.S GSP scheme for rubber, tires, vehicle wiring equipment, gold, fatty acids, metal jewelry, aluminum, gloves, musical instruments, speakers, keyboard, and battery.

Based on government data, In 2017, the Indonesian products using the GSP scheme worth $1.9 billion. This figure is still far below the GSP beneficiary countries such as India for $5.6 billion; Thailand $4.2 billion; and Brazil $2.5 billion.

Statistics Indonesia’s data showed the total trade between Indonesia and the United States in 2017 amounted to $25.91 billion. Of these, Indonesia’s exports reached $17.79 billion and imports amounted to $8.12 billion Indonesia. Thus, Indonesia towards the U.S surplus of $9.67 billion.

Indonesia’s main exports to the U.S include shrimp, natural rubber, footwear, vehicle tires, and garments. While Indonesia’s major imports from the U.S include soybeans, cotton, wheat flour, cornstarch, and animal feed.

Total trade between Indonesia and the U.S in 2017 increased 10 percent compared to 2016 were recorded at $23.44 billion. As for the trend of trade in the period 2013-2017 positive growth of 0.39 percent.

Meanwhile, trade between the two countries for the period from January to May 2018 has reached $11.85 billion. This value is increased compared to the same period last year, which stood at $10.65 billion.