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U.S. Looks to Lower Regulatory Barriers to Exports to Indonesia

Wednesday, September 23, 2015
Sandler, Travis & Rosenberg Trade Report

The U.S. and Indonesia held talks under their bilateral trade and investment framework agreement Sept. 18 ahead of an upcoming visit to the U.S. by Indonesian President Joko Widodo.

According to the Office of the U.S. Trade Representative, one of the primary topics of discussion was Indonesia’s new Economic Policy Package, which focuses on deregulation as a means of improving Indonesia’s business climate and competitiveness. The two countries agreed to work together on including regulations of specific interest to the U.S., such as those related to localization and foreign equity limitations, on the list of measures Indonesia will consider for deregulation. USTR’s 2015 report on foreign trade barriers notes that in recent years Indonesia has enacted numerous regulations on imports that have increased the burden for U.S. exporters, including import licensing procedures and permit requirements, product labeling requirements, pre-shipment inspection requirements, local content and domestic manufacturing requirements, and quantitative import restrictions.

Officials also discussed regional and multilateral issues, including the status of the Trans-Pacific Partnership negotiations and efforts to conclude the TPP “in the coming weeks,” the status of the Regional Comprehensive Economic Partnership being negotiated among 16 countries from India to Japan, cooperating to ensure progress under the TIFA between the U.S. and the Association of South East Asian Nations, and coordinating in the lead up to the World Trade Organization’s ministerial meeting in Kenya this December.

Talks also covered bilateral issues such as policies related to the information and communications technology sector, ICT policies to enhance economic growth and promote jobs, and efforts to address illegal, unreported and unregulated fishing.

USTR notes that U.S. goods trade with Indonesia totaled $28 billion in 2014 and that two-way services trade totaled $2.9 billion in 2013. However, the U.S. trade deficit with Indonesia rose 13.4 percent in 2014 to $11.0 billion. Indonesia is the eighth-largest export market for U.S. agricultural products, and U.S. foreign direct investment in Indonesia in 2013 was $13.5 billion, mostly in the energy and mining sectors.

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