U.S. may fund RI team for FTA study<\/p>\n
Adianto P. Simamora, The Jakarta Post, Jakarta<\/p>\n
The U.S. may help finance an independent Indonesian team to
\nstudy the feasibility of forging a free trade pact between the
\ntwo countries, underscoring Washington's intent to push open the
\nbiggest market in Southeast Asia.<\/p>\n
Following last week's visit of U.S. Trade Representative
\nRobert B. Zoellick to Bali, both governments will launch studies
\non a free trade pact against the backdrop of similar initiatives
\nacross the region involving the U.S. government.<\/p>\n
\"We will soon set up the independent team after we receive a
\ngrant from the U.S.,\" Minister of Industry and Trade Rini MS.
\nSoewandi said on Monday.<\/p>\n
She did not elaborate on the amount of the grant, but said
\nthe money would be used to hire the members of the independent
\nteam.<\/p>\n
Director General of Bilateral Trade Pos M. Hutabarat said the
\nteam would study the impact of a free trade deal with the U.S.
\nfrom the Indonesian perspective.<\/p>\n
\"The team will gather data in the field and map out the
\ncommodities that are ready to compete against U.S. products,\" Pos
\nexplained.<\/p>\n
He said the team's work would take between six months and one
\nyear period, but he could not say when it would start its work.<\/p>\n
Rini met with Zoellick in Bali last week where both agreed to
\nmove toward a free trade pact, pending the outcome of the study.<\/p>\n
The agreement comes on the back of a series of U.S.-backed
\nbilateral free trade initiatives across the region.<\/p>\n
Zoellick, representing the world's largest economy as well as
\nthe region's largest export market, has been actively touring
\nSoutheast Asian countries to open talks on free trade pacts.<\/p>\n
Singapore was the first to welcome the idea, and after two
\nyears of talks is now close to signing a final deal with
\nWashington.<\/p>\n
The U.S.' move into Indonesia follows plans for a free trade
\npact between members of the Association of Southeast Asia Nations
\n(ASEAN) and Japan and China.<\/p>\n
Under two separate deals signed early this month, ASEAN plans
\nto pull down trade barriers with Japan and China by 2010.<\/p>\n
Bilateral free trade talks are sweeping the region and
\nelsewhere in the world, signaling the frustration of governments
\nover slow progress at the World Trade Organization (WTO) and in
\nother projects, such as the Asia Pacific Economic Corporation
\n(APEC) forum.<\/p>\n
Washington hopes that by approaching countries individually
\nfor a free trade pact, it could push others into following suit
\nunder a strategy Zoellick has called \"competitive
\nliberalization.\"<\/p>\n
Experts have said that Indonesian exporters risked being
\npushed aside by competitors from countries that had already
\nsigned free trade agreements.<\/p>\n
Much of what Indonesia's exporters sell to the U.S. is also
\nproduced by other ASEAN members. The U.S. is Indonesia's biggest
\nexport market, accounting for some 16 percent of its total export
\nsales.<\/p>\n
Likewise, Indonesia with a population of more than 210 million
\npeople and an estimated 30 million-strong middle class represents
\nthe region's biggest market.<\/p>\n
So far, Indonesia enjoys an average trade surplus of US$3.5
\nbillion a year, with exports amounting to some $7 billion.<\/p>\n
The country's main exports to the U.S. are garments, textiles,
\nfootwear and shellfish. While agricultural products like cotton,
\nmaize, and wheat dominate U.S. exports to Indonesia.<\/p>\n
But pundits here warned that the situation could reverse
\nitself once Indonesia opened its doors to heavily subsidized U.S.
\nagricultural products. The local service sector is also deemed as
\nbeing vulnerable to foreign competition.<\/p>\n
\"The government must ensure that Indonesia will not end up
\nonly serving as a market for the U.S.,\" said Indonesian Chamber
\nof Commerce and Industry executive Soy Pardede last week.<\/p>",
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"sponsor": "Okusi Associates",
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