JAKARTA (Reuters) - Indonesia wants to expedite talks on a trade deal with the European Union and complete within a month a review of trade with the United States, the president and new deputy foreign minister said on Friday.
“I have set a target for the vice minister to finish negotiations with 14 to 15 countries with whom we need trade deals, especially with the European Union,” President Joko Widodo told a news conference where he introduced Vice Foreign Minister Mahendra Siregar, who has been assigned to conduct “economic diplomacy”.
Indonesia has been negotiating a free trade and investment agreement with the European Union since 2016. However, relations became strained by the European Commission’s decision to phase out palm oil from transport fuel by 2030 and the imposition of anti-subsidy duties on Indonesia’s biodiesel exports.
Siregar said President Widodo wanted him to ensure Southeast Asia’s biggest economy retained its privileged trade status with the United States, known as the Generalized System of Preferences (GSP), which gives Indonesia reduced tariffs on about $2 billion of exports.
Last year, the U.S. Trade Representative’s Office said it was reviewing the GSP eligibility of Indonesia, India and Kazakhstan, based on concerns over compliance with services and investment criteria. The GSP facility for India was revoked in June.
Getting the GSP eligibility extended “could have a massive impact which could double the size of our trade with the U.S.,” said Siregar, who earlier this year moved to Washington as Indonesia’s ambassador to the United States.
Washington has a number of demands for Indonesia to maintain the GSP status, which has mostly been fulfilled, including relaxing its data storage rules.
U.S. Commerce Secretary Wilbur Ross is scheduled to visit Jakarta next month.
Jakarta’s main foreign trade strategy would now be overseen by the foreign ministry under the president’s direct guidance, Siregar said, instead of the trade ministry.
Indonesia’s palm oil industry is also one of Widodo’s trade priorities and he wants to increase exports to over $25 billion a year, Siregar said. Exports of palm oil and derivatives in 2018 were $16.5 billion, according to government data.
Reporting by Fransiska Nangoy and Gayatri Suroyo; Additional reporting by Bernadette Christina Munthe; Editing by Richard Borsuk