No concrete step has been made, but intensive communications had been maintained with the United States in anticipating anything harmful to Indonesia that might come out of the Trump motion.Jakarta (ANTARA News) - The Indonesian government has reacted reasonably to U.S. President Donald J. Trumps executive order, which accused many countries of unfair trade.
No concrete step has been made, but intensive communications had been maintained with the United States in anticipating anything harmful to Indonesia that might come out of the Trump motion, an official has said.
Trump has passed orders to fulfill some of his campaign promises. Among the orders is for investigation of factors behind that countrys trade deficit and possible increase in collection of duties on imports.
A number of countries including Indonesia have been accused of unfair trade contributing to the U.S. trade deficit.
The executive orders are aimed at protecting the U.S. economy from dumping allegedly committed by its trade partners and manipulation of exchange rate causing the cheaper prices of imports.
Indonesia is placed the 15th in the list of countries having surplus in trade with the United States in 2016. China topped the list with a surplus of US$347 billion, followed by Japan, Germany, Mexico, Ireland, Vietnam, Italy, South Korea, Malaysia, India, Thailand, France, Switzerland, and Taiwan.
Indonesia was favored with a surplus of US$8.8 billion in bilateral trade with the United States in 2016. The surplus was larger at US$13 billion, according to the U.S. record.
Trump has not gone into details about possible sanctions to be meted out on those committing unfair trade, but the Trump motion could be a potential threat to Indonesia.
The United States is Indonesias largest trading partner, although Indonesia is only a minor trading partner for that country.
A number of observers and officials have questioned the Trump motion saying Trump has wrongly addressed his allegation to Indonesia.
Chief Economics Minister Darmin Nasution acknowledged Indonesia had been favored with a surplus in goods trade with the United States.
"But it does not necessarily mean harming that country. The United States might have larger surplus from trade in service and other transactions," Darmin said.
Relations between Indonesia and the United States are not limited only to goods trade, but also in trade of services and investment, he said.
Therefore, the Indonesian government is still awaiting the results of analysis of the executive order by President Trump, he said.
"The government has not taken steps, but intensive communications are maintained with that country, while preparing anticipatory step if necessary," he said.
Senior Deputy Governor of Bank Indonesia (BI) Mirza Adityaswara said Indonesia has caused no harm in trade to the United States.
Mirza said there are three criteria needed to accuse a country of harming the United States in trade.
First, the U.S. trading partner is favored with a trade surplus of more than US$20 million. Indonesia had only a surplus of not more than US$13 billion as claimed by the United States.
Second, the partner has a current account surplus. Currently Indonesia, instead of surplus, has a current account deficit 1.8 percent - 2 percent of its Gross Domestic Product.
Third , the partner continued foreign exchange intervention throughout a year to weaken domestic currency that exports to the United States would be cheaper. Indonesia has never intentionally sought to weaken rupiah to boost exports to the United States. So far, Bank Indonesia went to the market only to prop up the national currency when there was sharp fluctuation, Mirza said.
Introspection
Vice President Jusuf Kalla even has sent a clear message, asking the United States for introspection about trade practices. Currently many countries are suffering trade deficit in international trade.
"Trump accused us of being unfair just because his countrys trade deficit. Trade is always fair. Why we did not import more from the United States? It is because the prices are high," Kalla said.
He said the bilateral trade between Indonesia and the United States is transparent, not unfair.
Indonesia has never forced the United States to buy goods from Indonesia, he said, adding, they bought Indonesian goods because the price and quality are competitive.
Foreign Minister Retno Marsudi said Indonesia holds the principle of mutual benefit in international trade, and has always complied with the global trade regulations such as the regulation of the World Trade Organization (WTO) of which Indonesia is a member.
Therefore, Indonesia must see the executive order from comprehensive point of view not only trade of goods but also other transaction such as trade of services, Retno said.
Retno has summoned U.S.Ambassador Joseph Donovan to discuss issue of bilateral trade between the two countries.(*)
Reporter: Ahmad Buchori
Editor: Heru Purwanto
Copyright © ANTARA 2017
