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US and Indonesia announce steps to deepen trade and investment relations

Office of the US Trade Representative

USTR Schwab and Indonesia Trade Minister Pangestu Announce Steps to Deepen Trade and Investment Relations


Washington, D.C. - United States Trade Representative Susan C. Schwab and Indonesia’s Minister of Trade Mari Pangestu today agreed to formally establish working groups intended to deepen U.S.-Indonesia economic relations in four key areas: intellectual property rights, agricultural and industrial goods, services and investment.

Meeting under the United States-Indonesia Trade and Investment Framework Agreement (TIFA) to discuss bilateral, regional and multilateral trade issues, Schwab and Pangestu directed the new working groups to develop specific initiatives in these four areas to further enhance trade and investment ties between the two countries.

“I am pleased that The United States and Indonesia made additional progress in deepening our trade and investment relationship in our meetings this week,” said Amb. Schwab. “We also discussed how we could work together to advance ASEAN (Association of Southeast Asian Nations) integration and to help achieve a successful outcome to the ongoing WTO Doha Round negotiations. Indonesia is the largest economy in Southeast Asia and a major exporter of both agricultural and manufactured goods, so it has a lot to gain from a successful Doha Round.”

Ambassador Schwab welcomed the continued cooperation between the two sides under the bilateral Memorandum of Understanding (MOU) on cooperation to prevent illegal transshipment of textiles and apparel through Indonesia to the United States. The MOU, signed by Ambassador Schwab and Minister Pangestu last September, provides for customs cooperation, identification of textile and apparel manufacturers, and joint verification visits to provide each country’s government with the information necessary to stop textile and apparel transshipments.

During the TIFA, the two sides reviewed the solid progress made on implementation of the bilateral MOU to combat illegal logging and associated trade, signed last November. Since then, the two sides have met to develop cooperation and agree on specific activities that will be funded with the $1 million the United States already has dedicated to the MOU. The MOU is designed to promote forest conservation by combating illegal logging and associated trade and to help ensure that Indonesia’s legally-produced timber and wood products continue to have access to markets in the United States and elsewhere.

The meeting between Ambassador Schwab and Minister Pangestu capped a full day of TIFA meetings between delegations from both countries. The meetings covered a wide range of bilateral issues, including investment, intellectual property, services, customs, transshipment of goods, and agriculture. During the meeting, Indonesia noted its intention to respect World Organization for Animal Health (OIE) guidelines in determining access for U.S. beef. Ambassador Schwab and Minister Pangestu also exchanged views on Indonesia’s new Investment Law and the Indonesian government’s ongoing anti-corruption campaign, which the U.S. Government strongly supports. Business and government representatives from the United States and Indonesia also met under the TIFA to exchange views on ways to further strengthen trade and investment links between the two countries.


Indonesia is the United States’ 31st largest trading partner. Two-way trade totaled $16.5 billion last year, a 9.3-percent increase over 2005. Two-way trade in services with Indonesia totaled $1.6 billion in 2005, the latest data available. U.S. foreign direct investment in Indonesia was $9.9 billion in 2005, the latest data available.

Indonesia also is a key player in ASEAN. In August 2006, the United States signed a TIFA with ASEAN as a platform to intensify our trade and investment relations with the ASEAN region, which is commercially and strategically vital to the United States. With almost 600 million people and a combined GDP of $2.7 trillion, the ASEAN economies constitute the sixth largest economic group in the world. ASEAN members include Brunei Darussalam, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, and Vietnam.

 source: USTR