Indonesia agrees to enhance bilateral relations with Russia, US

Trade Minister Enggartiasto Lukita echoed the Indonesian government’s agreement to enhancing bilateral relations with Russia and the United States.

"We agree to step up bilateral trade and investment with Russia. Indonesia and Russia have agreed to identify things that have hindered cooperation between the two countries," the trade minister noted in a statement here on Friday.

During the 51st ASEAN Economic Ministers' Meeting (AEM) in Bangkok, Thailand, Russia sought the Indonesian government's support in the railroad project in Kalimantan. To this end, the trade minister remains committed to coordinating with the relevant ministries and institutions in Indonesia.

Furthermore, Russia expressed interest in potential investment in infrastructure development in connection with the relocation of the Indonesian capital.

In the meantime, the Indonesian government was heedful of the decision of the Russian parliament to hike the palm oil tax, from 10 percent to 20 percent.

Russia reiterated that the rise in palm oil tax concerned tariff adjustment and not protection. Russia does not produce palm oil, so it still requires the supply of Indonesian palm oil.

To this end, Russia affirmed that it will compute the impact of the tax hike on Russian consumption uptake.

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The two ministers were also on the same page to follow up on the trading plan to procure Sukhoi Su-35 fighter aircraft for Indonesia. Moreover, Indonesia urged Russia, as the largest economy in the Eurasian Economic Union, to support the initiative to form a trade agreement between Indonesia and the Eurasian Economic Union.

"Indonesia's potential trade with Russia is quite large. Hence, we encourage that trade barriers between the two countries can be overcome, and economic relations can be improved," the trade minister noted.

The way ahead is through a plan to form a trade agreement with the Eurasian Economic Union, taking into account that Russia is part of the Eurasian Economic Union and is the largest economy there.

Along with boosting trade with Russia, cooperation with the Eurasian Economic Union will offer benefits of Indonesia's trade with other member countries, including Armenia, Belarus, Kazakhstan, and Kyrgyzstan.

In the meantime, at a meeting with the Deputy United States Trade Representative (USTR), the trade minister discussed the scheme of generalized system of preferences (GSP) and issues of market access in the Indonesia-United States (US) trade relations.

The US government laid significant focus on several Indonesian Government regulations that are feared to hold back US investors from investing in Indonesia, such as Amazon and Google.

The regulation is a revision in Government Regulation (PP) No. 82 of 2012, particularly concerning the obligation to place data centers (data localization), which will be issued by the government.

Moreover, revisions to Government Regulation Number 14 of 2018 are related to foreign ownership in insurance companies.

"I give them assurance that the Government of Indonesia is striving to make investors comfortable by minimizing various trade and investment barriers," the trade minister stated.

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