Economists ask for leniency in U.S. trade policy

JAKARTA (JP): Indonesian economists expressed their dissatisfaction in a World Net dialogue here yesterday over the U.S. policy on trade with Indonesia.

Rizal Ramli, the managing director of Advisory Group in Economic, Industry and Trade (Econit), said that the U.S. trade policy for Indonesia is not as lenient as that for China.

The dialog, jointly organized by the Indonesia Economists Association (ISEI) and the U.S. Information Service (USIS), presented Nancy Adams, the assistant of the U.S. Trade Representative for the Asia Pacific Economic Cooperation (APEC), as speaker. She held her end of the discussion from Washington, via electronic communication.

Citing an example, Ramli told Adams about the failure of last month's bilateral textile negotiations between Indonesia and the United States.

Ramli blamed the failure on the U.S.'s hard line in the negotiations, saying that "Indonesia is not happy about the deadlock."

The United States is Indonesia's single largest market, importing about US$1 billion worth of textile and garments last year.

Based on the old agreement, Indonesia was allowed to increase the volume of its garments and textile exports to the American market by six percent a year.

Other speakers in yesterday's dialog were Director General of Tax Fuad Bawazier, U.S. Ambassador to Indonesia Robert Barry, U.S. Assistant Secretary of the Treasury Jeffrey R. Shafer, Chairman of ISEI Marzuki Usman, Chamrul Djafri of the Indonesian Textile Association and Rudy Lengkong of the National Agency for Export Development.

Chamrul stressed the need for the U.S. administration to give more room for its textile negotiators who are going to try and resuscitate the ailing negotiations at the end of this month.

"Where's the beef in the U.S. policy?" Ramli said, quoting a famous, American hamburger advertisement. He explained that the Americans should not just talk but also take action.

Relocation

Marzuki also suggested that the Clinton administration support the relocation of certain industrial activities from the United States to Indonesia, in a bid to increase U.S. investments in this country.

He said that it is better for American companies to relocate their factories to Indonesia due to the high cost of labor in the United States.

According to Marzuki, rather than selling machinery for labor intensive industries on the Indonesian market, American business people could use the machines in Indonesia, where labor wages are relatively low.

Adams, whose is in charge of developing and implementing trade and investment initiatives in Asia and the Pacific, declined to give a direct response. He did say that Asia-Pacific countries have to work together to increase their performance.

Ramli told Adams that Indonesia, due to its vast land area and growing influence both in international politics and economics, deserves a more lenient U.S. policy.

Marzuki added that the Jakarta government had also followed the advice of the Americans to continually deregulate Indonesia's business activities to encourage foreign investments.

Ironically, American business people are not very interested in investing in Indonesia, he said.

Ambassador Barry said it was important for Indonesian companies to honor labor rights and said that there is no need to accuse so-called "third parties" in every labor dispute.

He said the American people knew that the illusion of the communists standing behind all of Indonesia's social problems was false. (09)