How Indonesia should respond to U.S. economic saber rattling

How Indonesia should respond to U.S. economic saber rattling

Patrick Guntensperger, Business Consultant, Jakarta

ttpguntensperger@hotmail.com

It was recently reported that the United States has taken
Indonesia to task for what it claims are unfair trade practices.
The report, which lists Indonesia among 55 nations that allegedly
impose unfair trade barriers, accuses Indonesia of having badly
hurt the United States economy.

Of course after we have all finished wiping away our tears
pity for the poor suffering citizens of the U.S. and have
acknowledged our collective guilt for such economic bullying of
the world's most powerful and wealthiest nation, we might want to
ask ourselves just what the U.S. wants from Third World
countries. Once the question is posed, the answer becomes self-
evident. What does the U.S. want? Everything.

The United States in its dealings with smaller, less powerful
nations is congenitally incapable of recognizing their autonomy,
their rights, their individuality or even the most basic
principles of justice or fair play. And in the current
geopolitical situation that list of smaller, less powerful
nations includes every country in the world.

In its international trade posturing, as in most things, the
United States is sanctimoniously hypocritical. Can one really
take seriously the suggestion that an Indonesian refusal to
import substandard chicken parts is threatening the livelihood of
U.S. farmers?

While the whining that Indonesia is mistreating the U.S. in
its trade practices is obviously fatuous, this dispute underlines
one of the challenges that face a country like Indonesia at this
critical juncture in her progress to full maturity as a player in
the game of geopolitics and global economics.

How does one deal with a trading partner that is vastly more
powerful, enormously wealthy, always sees itself as the victim
and is utterly ruthless, both economically and militarily?
Unfortunately the option of just not dealing with the U.S. is not
realistic. The sad reality of the early 21st century is that we
all have to deal with the bully in the neighborhood.

The U.S. has a long history of unfair trade practices. For a
single, recent example, ask any of the thousands of mill workers
in British Columbia, Canada who were thrown out of work when a
protectionist tariff was slapped on Canadian timber products.

All of the rhetoric and doubletalk aside, everyone knows that
the tariff was an appeasement to a few U.S. mill owners
(Republican supporters) whose inferior lumber couldn't compete on
a level playing field. That's how the U.S. deals with its
"closest ally" and "friendliest neighbor" and "greatest trading
partner" and first signatory to NAFTA (North American Free Trade
Agreement). Should a country like Indonesia expect any better
treatment?

Every producing country needs access to the enormous U.S.
market, the world's largest importer of consumer goods.
Indonesia, in order to compete on a global level, must have broad
access to those insatiable consumers. However, that will only
happen on their terms. And those terms will be favorable to the
U.S. or there won't be any terms at all. The U.S.'s practice is
to concoct some accusation of protectionism (a sport for which
the U.S. holds the title) and shut the trade doors, choking the
weaker nation into submission, then reopening them on their own
terms.

Just the same, the U.S. is running a staggering trade deficit.
The country is buying products from foreign countries at an
unprecedented rate and exporting less and less every year; this
suggests that the unwritten policy of economic extortion is
likely to kick into overdrive soon. Now is the time for a forward
thinking Indonesian government to consider strategies for dealing
with the upcoming shoving match. Those strategies will determine
whether Indonesia has what it takes to make it in the big
leagues.

Threaten a trade embargo? That would be to shoot our self in
the foot. There is nothing the economic mandarins in the U.S.
would like more than to have inexpensive, good quality, foreign
products withdrawn from the shelves of U.S. shops. The more they
can redress their balance of trade the happier they'd be. An
Indonesian strategy must be to make her products so indispensable
to the U.S. that no administration could summon the political
will to tax them out of reach of the citizens. A major initiative
to develop a popular market in the West for Indonesian products
would accomplish that.

Every few years, the U.S. public develops a crush on a foreign
culture. At different times in the 20th century, the French, the
Mexicans, the Australians and the Japanese have benefited
enormously from a popular fascination with their countries.
Indonesia could conceivably ride a similar wave of popularity.
Raise the Western consciousness about things Indonesian and the
economic benefits will be uncountable.

A focus on foreign trade, encouraging tourism (rethink the new
visa on arrival policy, but that's another article) and a
dedication to supporting companies that produce uniquely
Indonesian consumer goods for the export market are concepts that
we should look for in a new government's platform.