RI not serious about FTA with U.S., says USAID<\/p>\n
Zakki P. Hakim, The Jakarta Post\/Jakarta<\/p>\n
The United States perceived Indonesia as half-hearted in its
\ncommitment to establishing a free-trade agreement (FTA) between
\nthe two countries, thus leaving the talks in limbo, an official
\nof the U.S. Agency for International Development (USAID) said on
\nFriday.<\/p>\n
USAID economic consultant Stephen Wendel suggested that
\nIndonesia should take immediate action to accelerate the talks or
\nface the risk of losing market share in the U.S.<\/p>\n
\"Indonesia is not serious. If both are serious, it is possible
\nfor an agreement,\" Wendel told The Jakarta Post.<\/p>\n
According to Wendel, the U.S. was very concerned about the
\nviolation of intellectual property rights in Indonesia, and if
\nthe government remained passive in tackling the issue, the U.S.
\nwould most likely be reluctant about further FTA talks.<\/p>\n
Wendel went on that it was important for Indonesia to pursue
\nan FTA deal with the U.S.; otherwise, Indonesia's market share
\ncould shrink, as other countries were making aggressive moves to
\nforming an FTA with the U.S.<\/p>\n
For example, he pointed out that Thailand was now closer to
\nestablishing an FTA with the U.S., which might threaten half of
\nIndonesia's exports to the U.S.<\/p>\n
Under the FTA with Thailand, the U.S. is to cut significantly
\nimport tariffs for several of Thailand's export commodities,
\nwhich would make them more competitive than similar products from
\nIndonesia.<\/p>\n
Wendel said the tariff cut, for instance, would make Thai
\nfootwear products about 20 percent cheaper than Indonesian
\nproducts in the U.S. market, while Thai-made women's and girls'
\nclothing would be 12 percent lower.<\/p>\n
Indonesia exported about US$1.1 billion worth in women's and
\ngirls' clothing to the U.S. last year, and $602 million in
\nfootwear exports. According to latest data at the Ministry of
\nIndustry and Trade, the country's total exports to the U.S.
\nreached $6.4 billion from January to November in 2003.<\/p>\n
USAID senior economist, William E. James, said Indonesia had a
\nlot to gain and less to lose in establishing an FTA with the U.S.<\/p>\n
As the majority of Indonesia's top exports to the U.S. were
\nsubject to pay high duties, significant cuts under an FTA
\nmechanism would surely boost export volume, he said.<\/p>\n
On other hand, U.S. exports would not experience much of a
\nboost, as most key American products have entered Indonesia with
\nlow tariffs. Only cars and other motor vehicles, which only
\naccounted for 0.3 percent of U.S. exports to Indonesia, reached
\n$2.4 billion in the first 11 months of last year.<\/p>\n
Wendel added that since the U.S. might not gain much from the
\ntrade deal in terms of export of commodities, it would propose
\nwider market access for its services including transportation,
\ntravel and commercial services.<\/p>\n
According to a study by the University of Indonesia, some 50
\nproducts had the potential to be included in the planned FTA with
\nthe U.S, including textile, apparel, furniture sound recorders or
\nreproducers, natural rubber latex, telecommunication equipment
\nand mollusks and fish.<\/p>",
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"sponsor": "Okusi Associates",
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