US Vice President Pence's Visit to Indonesia Meets Resistance
US Vice President Mike Pence plans to visit Indonesia next week. Indonesia is Pence's third stop during his April 15-25 Asia-Pacific tour. Aim of this short tour is to safeguard and enhance good relations with several Asia-Pacific nations, including Indonesia, as well as boosting regional security cooperation. However, there is plenty of resistance to Pence's visit to Indonesia. Some say he could better cancel the visit as the visit would put the Indonesian government in an awkward position.
US President Donald Trump's controversial decisions and unclear foreign policies have caused quite some resentment in Indonesia. For example, the recent US missile strike against a Syrian airbase and the banning of citizens of several Muslim-majority countries from traveling to the USA were disapproved by most communities in Indonesia. Such decisions are not in line with the values of Indonesia and therefore a diplomatic meeting between both nations puts the Indonesian government in an awkward position.
Another sensitive issue is that in March 2017 Trump ordered a comprehensive review in trade imbalances with 16 nations, including Indonesia. According to Trump there could be cases of trade abuse that cause a US trade deficit with these countries. In full-year 2016 Indonesia had the upper hand in terms of trade with the USA, recording a USD $13 billion trade surplus primarily on the back of exports of textiles, footwear, fishery products and natural resources. However, such trade deficits are not in line with Trump's protectionist "America First policy". The insinuation that Indonesia is conducting trade abuses was not well received in Southeast Asia's largest economy.
The "America First policy" is also why Trump decided to withdraw the USA from the Trans-Pacific Partnership trade deal, one of his first decisions after becoming US president in January 2017. In his opinion the USA did not benefit enough from this free trade deal.
Recently, the USA also filed a complaint at the World Trade Organization (WTO) over the importation of horticultural products, animals and animal products from Indonesia. Moreover, the US National Biodiesel Board urges the US government to impose anti-dumping duties on biodiesel from Indonesia, as it is believed Indonesian biodiesel is being sold below production costs because Indonesian producers enjoy "illegal subsidies" at home.
Meanwhile, Indonesia has also embraced a protectionist approach since 2009, particularly with regard to its natural resources. New regulations in the mining sector (Law No. 4/2009 on Mineral and Coal Mining) are the reason why Freeport Indonesia, the local unit of American mining giant Freeport McMoRan, is in an ongoing dispute with the Indonesian government. Indonesia's Tax Office has also taken a tough stance against Alphabet's Google, demanding back taxes and fines, as Google earns a lot from digital advertising in Indonesia but pays few taxes in the country as most of Google's Asia-Pacific revenue goes through its regional headquarters in Singapore.
Pence is expected to meet Indonesian President Joko Widodo and Vice President Jusuf Kalla, as well as US and Indonesian business leaders during his visit to Indonesia next week.
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