Rahardi to meet Aussie minister in Singapore

Rahardi to meet Aussie minister in Singapore

JAKARTA (JP): Minister of Industry and Trade Rahardi Ramelan
said on Tuesday he would meet Australian Minister of
International Trade Mark Vaile in Singapore this week on the
sidelines of an Asean Free Trade Area (AFTA) meeting.

"I received a letter from the Australian minister of
international trade last night requesting a meeting in Singapore
during my visit to attend the AFTA council meeting," Rahardi
said, adding that he had allocated time to meet him in person.

The Australian minister, Rahardi said, would like to discuss
the concern over Indonesian reaction to an Australian maritime
union boycott, he said.

"My position over the matter remains the same as before as I
would facilitate and help Indonesian businessmen seeking the best
solution," he said, adding that he would even help in
negotiations with the new suppliers.

He simply could not stop the decision made by Indonesian
businessmen to stop importing from Australia.

The Australian Maritime Union held a week-long boycott earlier
this month in an effort to put pressure on the Indonesian
government to end violence in East Timor.

The boycott stranded goods, bound for and originating from
Indonesia, at Australian ports, as the union refused to load and
unload the goods.

They lifted the boycott last week, but threatened to reimpose
it if Indonesia restricted the UN peacekeeping forces' activities
in restoring order and peace to East Timor.

"The Australian trade union boycott lasted only for a few
days, but we simply can't predict when the next one may occur.
Therefore we have to take precautions," Rahardi said.

Indonesian businessmen have taken precautions to shift imports
from Australia to other countries in anticipation of a further
boycott by the union.

Last week, Indonesian wheat importers decided to halt or
reduce wheat imports from Australia.

Indonesia used to import 2.5 million metric tons of wheat
worth US$380 million, or 50 percent of its annual total imports,
from Australia.

The Indonesian Association of Pulp and Paper also announced on
Monday its intention to switch pulp imports from Australia to
Canada and the United States. Australia used to supply 1.8
million tons of pulp annually to Indonesia.

Textile producers, which usually imports 206,344 tons of
cotton fiber from Australia or 45 percent of their annual total
needs have also expressed support of the planned boycott of
imports.

Textile association

The Indonesian Textile Association (API) said on Tuesday that
its members had also agreed to shift cotton imports from
Australia to other countries, including China, the United States,
and several African countries.

"Several shipments for our members are still stranded at
Australian ports, as some unions in several Australian cities
still refuse to handle Indonesian goods," API deputy chairman
Benny Soetrisno said.

"We have to be ready for the worst case as the relationship
between Australia and Indonesia is becoming increasingly
strained," he added.

The textile industry could not afford a halt in production, he
said, adding that they would suffer financial loss and also lose
their international market share.

Benny admitted that cotton imports from other countries could
increase prices, citing the United States, as an example, from
which imports are usually between 8 percent and 10 percent more
expensive than those from Australia.

The Cotton Association of Australia is currently negotiating
with the Australian maritime union to stop boycotting cotton
shipments to Indonesia, he said.

Currently, Indonesian textile producers can only stock cotton
for up to 30 days of production, compared to 60 days before the
financial crisis, because of the difficulty in obtaining letters
of credit (LC) for financing imports.

"Cotton imports from Australia are actually quite beneficial
because the short distance facilitates faster, lower-cost
deliveries, their quality is good and their prices are quite
reasonable," he added.

Indonesia also imports from the United States, Pakistan and
several other countries.

In a related development, minister Mark Vaile told Reuters in
Canberra on Tuesday that he would meet with Rahardi in Singapore
to smooth over strained relations between the two nations.

Vaile wanted to reinforce the importance of Australian-
Indonesian trade, considering that Indonesia was experiencing a
trade surplus between the two countries.

Separately, Minister of Energy and Mines Kuntoro Mangkusubroto
said the government would protect the safety of Australian
investment in the mining sector despite the tension in relations
between the two countries.

"The strained relations should not affect contracts in the
mines and energy sector as it was only temporary," Kuntoro said,
adding that Australian investors played a significant role in the
country's mining industry. (02)