(Dec 10): US Trade Representative Jamieson Greer is set to speak with a top Indonesian official this week in hopes of salvaging a trade framework at risk of collapsing, the Financial Times (FT) reported Tuesday.
Greer is planning to talk with Airlangga Hartarto, the Indonesian coordinating minister for economic affairs, in an effort to revive a deal struck in July that would see US tariffs on Indonesian goods reduced from a threatened 32% to 19% in exchange for a series of concessions.
But US officials now believe Jakarta is reneging on agreements to eliminate non-tariff barriers on American industrial and agricultural exports, as well as digital trade issues, the newspaper reported. The two sides are also clashing over an effort by the US to include clauses that Indonesia sees as an infringement on its economic sovereignty, according to the FT.
Indonesia said US tariff negotiations are ongoing, and expects to soon reach an agreement that is “beneficial for both parties.”
“There are no specific issues in the negotiations, and dynamics in the negotiation process are normal,” Coordinating Ministry for Economic Affairs spokesperson Haryo Limanseto told Bloomberg News on Wednesday.
Representatives for the White House and US Trade Representative did not immediately respond to a request for comment on Tuesday night, while Greer declined to comment.
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Under the deal announced in July, Indonesia announced plans to purchase some US$19 billion ($24.64 billion) in American products, led by 50 Boeing Co jets, and erase duties on imports from the US. The country also agreed to eliminate some requirements on products including local content that had complicated efforts to sell American products in the country. President Donald Trump said at the time he had dealt directly with Indonesian President Prabowo Subianto to finalize the agreement.
But because Trump moved first to reduce the tariff, officials in Jakarta felt little urgency to finalise the deal or move quickly to fulfill the commitments and intentionally looked to delay the concessions, according to people familiar with Indonesia planning.
Since then, Trump unveiled a flurry of trade frameworks with Thailand, Cambodia, Vietnam and Malaysia that saw similar agreements to reduce tariff barriers, including on industrial and agricultural products.
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While the US president has eagerly agreed to sweeping trade pacts — and quickly adjusted tariff rates in response – fuller negotiations on specific terms have repeatedly proved protracted and difficult.
Greer on Tuesday night told a congressional panel that he expects to sign more trade deals in coming weeks, as global trading partners await a Supreme Court decision deciding the legality of the emergency authority behind President Donald Trump’s sweeping tariffs.
Greer didn’t specify which countries would be included in the upcoming trade deals.
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