US, In­done­sia agree to cut bar­ri­ers to trade, in­vest­ments

The Philippine Star - - BUSINESS -

JAKARTA (Reuters) – In­done­sia and the US 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 US 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 Asi­aPa­cific 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 told Reuters. “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 US, "es­pe­cially pro­duc­tiv­ity-en­hanc­ing prod­ucts and ser­vices. You need im­ports to boost ex­ports."

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 de­mand­ing the com­pany di­vest 51 per­cent 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.”

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