Kadin Says US Stimulus Plan Will Have Minor Impact on Indonesian Exports
The proposed US government stimulus package, which includes some measures that may limit trade, is not expected to have a major impact on Indonesian exports, Sofyan Wanandi, deputy advisory chairman of the Indonesian Chamber of Commerce and Industry, or Kadin, said on Monday.
Speaking by phone from The Hague, Netherlands, Sofyan said that after discussions with US trade representatives on Sunday, he was informed that under the plan, the US government would only purchase local supplies of iron, steel and heavy equipment to be used in specific infrastructure projects.
Sofyan is accompanying Vice President Jusuf Kalla on an overseas tour, which includes a stop in Japan, the United States and the Netherlands.
The House version of the stimulus package, also known as the American Recovery and Reinvestment Act, asserts that local infrastructure projects should be encouraged to “buy American,” specifically referring to locally made steel.
The clause was earlier seized upon by Indonesian textile and footwear producers, who worried that it signaled a broadly protectionist move which would affect Indonesian exports to the United States, the country’s second-largest trading partner after Japan.
The Indonesian Textile Association, or API, claimed two weeks ago that it could lose “billions” of dollars if the US government approved the provision.
“We predicted that in the first quarter of this year, the country’s textile exports to the US will decline by 30 percent due to the economic slowdown, but if the protectionist article passes, we could lose 90 percent of our export income,” API’s deputy chairman Ade Sudrajat said in late January.
Indonesia’s non-oil and gas exports to the US for the full year of 2008 reached $12.5 billion, compared to $11.3 billion the previous year.
However, on a monthly basis, exports to the US dropped to $907 million in December from $935 million in November and are expected to be trending lower.
A US Embassy official told the Jakarta Globe that the stimulus package would take World Trade Organization rules into consideration.
“We are aware of the concerns being voiced by trade partners, but once again I assure you that President Obama has said that he does not want the package to contain provisions that would violate WTO agreements or in other ways signal protectionism,” said Stafford A. Ward, assistant press attache of the public affairs section of the US Embassy.
Industry Minister Fahmi Idris said that the government would study the impact of the US policy before acting.
The stimulus plan has two versions, one already passed in the House of Representatives and the other still being debated upon in the Senate. The two versions will have to be reconciled before it is signed into law.
The $819 billion act is intended to stimulate the US economy in the wake of the economic downturn brought about by the subprime mortgage crisis.
Speaking by phone from The Hague, Netherlands, Sofyan said that after discussions with US trade representatives on Sunday, he was informed that under the plan, the US government would only purchase local supplies of iron, steel and heavy equipment to be used in specific infrastructure projects.
Sofyan is accompanying Vice President Jusuf Kalla on an overseas tour, which includes a stop in Japan, the United States and the Netherlands.
The House version of the stimulus package, also known as the American Recovery and Reinvestment Act, asserts that local infrastructure projects should be encouraged to “buy American,” specifically referring to locally made steel.
The clause was earlier seized upon by Indonesian textile and footwear producers, who worried that it signaled a broadly protectionist move which would affect Indonesian exports to the United States, the country’s second-largest trading partner after Japan.
The Indonesian Textile Association, or API, claimed two weeks ago that it could lose “billions” of dollars if the US government approved the provision.
“We predicted that in the first quarter of this year, the country’s textile exports to the US will decline by 30 percent due to the economic slowdown, but if the protectionist article passes, we could lose 90 percent of our export income,” API’s deputy chairman Ade Sudrajat said in late January.
Indonesia’s non-oil and gas exports to the US for the full year of 2008 reached $12.5 billion, compared to $11.3 billion the previous year.
However, on a monthly basis, exports to the US dropped to $907 million in December from $935 million in November and are expected to be trending lower.
A US Embassy official told the Jakarta Globe that the stimulus package would take World Trade Organization rules into consideration.
“We are aware of the concerns being voiced by trade partners, but once again I assure you that President Obama has said that he does not want the package to contain provisions that would violate WTO agreements or in other ways signal protectionism,” said Stafford A. Ward, assistant press attache of the public affairs section of the US Embassy.
Industry Minister Fahmi Idris said that the government would study the impact of the US policy before acting.
The stimulus plan has two versions, one already passed in the House of Representatives and the other still being debated upon in the Senate. The two versions will have to be reconciled before it is signed into law.
The $819 billion act is intended to stimulate the US economy in the wake of the economic downturn brought about by the subprime mortgage crisis.