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)