JAKARTA (Reuters) - Indonesia and the United States agreed on Friday to find ways to reduce barriers to U.S. companies operating in Southeast Asia’s largest economy, visiting U.S. Vice President Mike Pence and Jakarta’s investment chief said.
The Trump administration has put Indonesia on a list of 16 countries whose trade surpluses with the United States will be put under review. A series of disputes between Indonesia and American firms has also ruffled ties.
“We will work with President Jokowi to reduce barriers to trade and investments and to create a truly level playing field where all our businesses have equal opportunity and market access,” Pence said. Jokowi is the nickname of Indonesia’s President Joko Widodo.
“The president and I spoke about that very candidly and very respectfully,” Pence told a roundtable discussion with business executives in Jakarta before flying to Australia on the last leg of his 10-day Asia-Pacific tour.
Indonesia’s investments barriers include a lack of intellectual property protection, insufficient transparency with regulations and requiring local content for manufactured goods sold in the Indonesian market, Pence said.
Indonesia’s Investment Coordinating Board chief Tom Lembong said Widodo agreed “we still have too many regulations, too many barriers to trade, and these are bad for local and international industries”.
“I’m optimistic because President Jokowi and President Trump are both lifelong business people, and I think they are very focused on the practical issues that hinder business and investment,” Lembong told Reuters. “I feel that the Trump administration and the Jokowi administration are on the same wavelength.”
Lembong said Indonesia needs both investment and imports from the United States, “especially productivity-enhancing products and services. You need imports to boost exports.”
Neither side disclosed any discussions about the disputes Indonesia has had with American companies of late.
Over the past six months, Indonesia has wrestled with mining giant Freeport McMoRan (FCX.N), demanding the company divest 51 percent of its shares in its Papua-based gold and copper mine, and has demanded that Google Inc. settle unpaid taxes and fines of more than $400 million. Jakarta also scrubbed JP Morgan from its list of primary bond dealers after what was deemed a negative research report.
Pence did, however, witness the signing of more than $10 billion in memoranda of understanding with U.S. companies in Indonesia on Friday.
Among the 11 agreements were ones by Exxon Mobil (XOM.N) to sell liquefied natural gas to Pertamina, Lockheed Martin (LMT.N) to provide upgrades to the Indonesian Air Force’s F-16s, and General Electric (GE.N) to develop electrical infrastructure in Indonesia.
“We think there are opportunities to clear open the way for American companies to participate more greatly in Indonesia,” Pence said, adding the agreements would “draw our nations closer together and benefit both our people.”
Pence said in opening remarks to the roundtable that an attack in central Paris is the latest reminder terrorism can strike anywhere at anytime, and the United States would not relent in its efforts to end terrorism.
“The people of Indonesia can be confident in the wake of this latest attack: We will not relent in our effort to end terrorism and the threat it presents to both of our peoples,” Pence said.
A French policeman was shot dead and two others were wounded in central Paris on Thursday night in an attack carried out days before presidential elections and quickly claimed by the Islamic State militant group.
Indonesia, the world’s largest Muslim-majority nation, has itself been hit by a series of deadly attacks over the past 15 years, led by militants affiliated with al Qaeda and more recently by Islamic State.
Pence said Washington would continue working with Indonesia to combat terrorism. On Thursday, Pence toured the Istiqlal Mosque in Jakarta, Southeast Asia’s largest, and said Indonesia’s moderate form of Islam should serve as an example to other nations.
Indonesia has expressed concern about the Trump administration’s proposal to bar entry to citizens of some predominantly Muslim nations. That plan, however, remains stalled in courts.
Pence on Thursday announced Trump would visit Southeast Asia in November for an annual series of regional summits. They include the Asia-Pacific Economic Cooperation meeting in Vietnam and the Association of Southeast Asian Nations summit in the Philippines.
Editing by Fergus Jensen and Bill Tarrant; Editing by Bill Tarrant