Search

 

Cablegate: Tifa Dialogue Highlights Trade and Investment Challenges

VZCZCXRO3485
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #0175/01 0290600
ZNR UUUUU ZZH
R 290600Z JAN 08
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 7773
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHKL/AMEMBASSY KUALA LUMPUR 2445
RUEHBK/AMEMBASSY BANGKOK 8304
RUEHGP/AMEMBASSY SINGAPORE 6259
RUEHDT/AMEMBASSY DILI 0919

UNCLAS SECTION 01 OF 03 JAKARTA 000175

SIPDIS

SINGAPORE FOR SUSAN BAKER

SIPDIS
SENSITIVE

DEPT PASS TO USTR SCHWAB
DEPT FOR EAP/MTS, EAP/IPE, EB/TPP, EB/TPP/BTA
COMMERCE FOR JKELLY
USTR FOR BWEISEL
USTR FOR RBAE
TREASURY FOR IA-BAUKOL

E.O. 12598: N/A
TAGS: BEXP EINV ECON ID
SUBJECT: TIFA DIALOGUE HIGHLIGHTS TRADE AND INVESTMENT CHALLENGES

JAKARTA 00000175 001.2 OF 003


1. (SBU) SUMMARY: On January 22, Assistant United States Trade
Representative Barbara Weisel met with Government of Indonesia (GOI)
officials to discuss investment and intellectual property (IP)
issues under the U.S.-Indonesia Trade and Investment Framework
Agreement (TIFA). Weisel expressed concerns over languishing
U.S.-Indonesian trade relations and offered suggestions to
rejuvenate the relationship. GOI officials responded that they
welcomed ideas, but presented few of their own. End Summary.

I Want to Hold Your Hand
-------------------------

2. (SBU) AUSTR Weisel met with Special Assistant to the Minister of
Trade for International Trade Cooperation Halida Miljani to discuss
the need to develop positive momentum on trade and investment
issues. Weisel described the current dialogue on bilateral trade
issues as lacking. She compared it unfavorably to U.S. TIFA
dialogues with other ASEAN countries and shared examples of
substantial U.S. trade cooperation with Vietnam and Cambodia. She
argued that the limited U.S. trade engagement does not "do justice"
to overall U.S.-Indonesian relations and recommended both sides
identify mutual areas of interest to advance the relationship.
Weisel offered several ideas, including opening an exploratory
dialogue on a Bilateral Investment Treaty (BIT) and updating
Indonesia's OPIC agreement. She also suggested tailored proposals
targeting specific business sectors.

I'm Happy Just to Dance with You
---------------------------------

3. (SBU) Halida agreed in principle on the need to rejuvenate trade
relations, but offered few suggestions on how to move forward. She
cited U.S.-Indonesian agreements on textiles and illegal logging as
good examples of cooperation and evidence of progress in trade
relations. She explained that the GOI is focused on domestic
economic priorities, particularly price stabilization of
agricultural products. She also proposed creating a bilateral
dialogue to consider ideas. (Weisel responded that any initiative
can be launched under the existing TIFA.) Halida suggested that the
U.S. propose ideas for trade initiatives and the GOI would consider
them internally before deciding how to proceed. She also requested
increased capacity building assistance, but did not specify in what
areas.

The Long and Winding Road
--------------------------

4. (SBU) The GOI arranged an investment working group meeting led by
Investment Coordinating Board (BKPM) Deputy Chairman Hidayat
Suralaga. AUSTR Weisel raised concerns from the business community,
including a persistent pattern of investment disputes and recurring
issues with Indonesia's Investment Law. She argued that the
cumulative effect has been a negative perception of Indonesia by the
U.S investment community. Suralaga responded that GOI is aware of
business sector concerns and affirmed GOI commitment to address
investment issues on a case-by-case basis. He was unresponsive,
however, to suggestions that GOI develop internal mechanisms to
resolve investment issues systematically. He also asked the U.S. to
forward specific examples of U.S. companies adversely affected by
the Investment Law to BKPM.

How Do You Do It?
-----------------

5. (SBU) AUSTR Weisel asked about the recent changes to Indonesia's
negative foreign investment list and the status of the implementing
regulations to the 2007 Investment law. She also asked about the
process for considering and implementing future changes to the
negative list. Suralaga responded that a review is planned for
every 3 years. Weisel referenced public remarks by Trade Minister
Mari Pangestu suggesting the list was "still open for more review
and revisions." Suralaga conceded that there will be opportunities
for revisions before three years. He identified transportation as a
possible sector for review, but explained that the GOI is waiting
for Parliament to first pass a transportation bill.


JAKARTA 00000175 002.2 OF 003


If You've Got Trouble
---------------------

6. (SBU) Weisel asked about the status of the GOIs National Team
for the Promotion of Exports and Investment (PEPI). PEPI was
instrumental in drafting the implementing regulations to the
investment law and recommending revisions to the negative list. In
addition, PEPI's structure, with Minister-chaired working groups
reporting directly to the Coordinating Minister for Economic
Affairs, facilitated expedited issuance of a Presidential Decree.
Lastly, PEPI officials had offered to help mediate investor
disputes. Suralaga could not confirm whether PEPI will be
institutionalized to serve as the prime coordinating mechanism for
investment policy, or whether it will be used strictly on an ad hoc
basis to address regulations and amendments to the negative list as
needed. He suggested that investment disputes be brought to the
attention of BKPM Chairman Lutfi first and that he will refer
investors to individual ministries (or to PEPI) as appropriate.

Here Comes the Sun
------------------

7. (SBU) Suralaga announced that the GOI is ready to begin
exploratory discussions on a BIT, but will need to coordinate
internally before committing to a specific date. Hidayat also
noted that Indonesia is in the process of finalizing BIT
negotiations with Canada, France and Belgium. He confirmed that
BKPM will have the lead in BIT discussions. Suralaga provided no
indication, however, of Indonesia's willingness to update its OPIC
agreement. Weisel promised that the U.S. would follow up with him
over the next few weeks to schedule a digital video conference
(DVC).

With a Little Help from My Friends
-----------------------------------

8. (SBU) The GOI organized an intellectual property working group
meeting jointly led by Halida and the Director General for IPR (DG
IPR) Andy Sommeng. Halida presented GOI's 2008 IPR action plan
which included public outreach, increased training and education,
improved law enforcement and more effective coordination among
institutions and ministries. Halida announced GOI's intention to
draft a "National Intellectual Property Policy" to coordinate the
work of the IPR National Task Force.

Paperback Writer
----------------

9. (SBU) DG IPR Andy Sommeng noted that his office has finished
drafting amendments on patent, copyright and industrial design law
that will soon be submitted to Parliament. USTR Director of
Intellectual Property Rachel Bae expressed hope that the amendments
will complete Indonesia's adoption of legal standards consistent
with the WTO-administered Trade Related Aspects of Intellectual
Property Rights (TRIPS) agreement. Bae also raised a number of
specific questions related to Indonesia's action plan. Halida
requested that, because of time constraints, USTR submit the
questions in writing.

While My Guitar Gently Weeps
-----------------------------

10. (SBU) Inter-agency rivalries and lack of coordination continue
to bedevil Indonesia's investment policy. In a meeting with Embassy
officials a week before USTR's visit, Deputy Minister for
International Economic Cooperation at the Coordinating Ministry for
Economic Affairs Mahendra Siregar signaled that the GOI was open to
initiating an exploratory dialogue on the BIT. He also suggested
the GOI would consider incorporating an update of Indonesia's OPIC
agreement in the latter stages of BIT negotiations. However that
assessment does not appear to reflect a consensus among participants
of the investment working group. We believe a strengthened and
empowered PEPI could be a key stakeholder for coordinating
investment policy and promoting reform. However, as with any
coordinating body in Indonesia, PEPI's success may pose a threat to
vested bureaucratic interests and as such raise questions over its

JAKARTA 00000175 003.2 OF 003


future. END COMMENT

HUME

© Scoop Media

 
 
 
 
 
World Headlines

 

Werewolf: Gordon Campbell On North Korea, Neo-Nazism, And Milo

With a bit of luck the planet won’t be devastated by nuclear war in the next few days. US President Donald Trump will have begun to fixate on some other way to gratify his self-esteem – maybe by invading Venezuela or starting a war with Iran. More>>

Victory Declared: New Stabilisation Funding From NZ As Mosul Is Retaken

New Zealand has congratulated the Iraqi government on the successful liberation of Mosul from ISIS after a long and hard-fought campaign. More>>

Gordon Campbell: On The Current US Moves Against North Korea

If Martians visited early last week, they’d probably be scratching their heads as to why North Korea was being treated as a potential trigger for global conflict... More>>

ALSO:

Gordon Campbell: On The Lessons From Corbyn’s Campaign

Leaving partisan politics aside – and ignoring Jeremy Corbyn’s sensational election campaign for a moment – it has to be said that Britain is now really up shit creek... More>>

ALSO:

Another US Court: Fourth Circuit Rules Muslim Ban Discriminatory

ACLU: Step by step, point by point, the court laid out what has been clear from the start: The president promised to ban Muslims from the United States, and his executive orders are an attempt to do just that. More>>

ALSO:

 
 
 
 
 
 
  • Pacific.Scoop
  • Cafe Pacific
  • PMC