Wed, 03 Aug 1994

U.S. is expected to extend GSP to RI: Diplomat

JAKARTA (JP): Washington is likely to continue granting trade privileges under the Generalized System of Preferences (GSP) to Indonesia after a six month long review ends this month, a former Indonesian ambassador to the United States says.

Lt. Gen. (retired) A. Hasnan Habib said yesterday that he did not expect Washington to deny Indonesia the GSP because doing so would harm its expanding economic relations with Indonesia.

Hasnan told reporters, after attending a monthly luncheon meeting organized by the Indonesian Executive Circle, that Indonesia has done its part to improve labor conditions, the main reason Washington was reviewing the GSP.

If the U.S. decides to remove Indonesia from the system, "it means they do not acknowledge Indonesia's efforts and initiatives in improving labor conditions so far," he said.

U.S. Ambassador to Indonesia Robert L. Barry was the guest speaker at the luncheon.

Washington had been expected to announce the result of its six month review on Aug. 15 but in a new twist, visiting assistant Secretary of State Winston Lord said on Monday that there was no specific deadline regarding the GSP review.

The U.S. government last year threatened to revoke the GSP, alleging that Indonesia had failed to respect the basic rights of workers, including their right to organize and the employment of children.

It gave Indonesia until Feb. 15 to comply but extended the review period for another six months to study the steps Indonesia had taken to improve the labor conditions.

Under the GSP, a select number of Indonesian exports, worth $650 million annually, are granted duty free privileges each year.


Hasnan said he is optimistic because Indonesia is gaining ground in preventing major trading partners' attempts to link labor and human rights issues with trade and economic ties.

"Labor issues should be handled by the (United Nation's) International Labor Organization, and should not be linked with trade issues," he said.

Hasnan also believes Indonesia's chairmanship of the Asia- Pacific Economic Cooperation (APEC) forum is a factor which should encourage the United States to reconsider removing Indonesia from the GSP system.

A recent U.S. government publication also listed Indonesia as one of the countries in the Asia-Pacific region that offers major trade and business opportunities to American companies.

Indonesia has taken a number of steps in the past year to improve labor conditions but the government insists that these measures had been in the pipeline and had nothing to do with Washington's threat to revoke the GSP.

The measures include boosting the officially set minimum wage, revamping the All Indonesian Workers Union back to its original format as a federation of workers unions, and punishing employers who fail to respect the workers' rights. (pwn)