Today, the U.S. Department of Commerce is leading a delegation of U.S. business representatives to explore new opportunities and collaboration in the Indonesian market as part of the Clean EDGE Asia Business Development Mission. It marks the first U.S. government trade mission to the Asia region following last month’s historic signing of the Indo-Pacific Economic Framework for Prosperity (IPEF) by President Biden, President Jokowi, and other leaders in the region. IPEF consists of the United States, Indonesia, and 12 other partners.
The mission aims to support and accelerate Asia’s clean energy transition by harnessing the expertise and resources of the U.S. public and private sectors. It is bringing together leading U.S. renewable energy companies involved in the development of solar, wind, biomass, and other forms of renewable energy to meet with Indonesian energy sector partners and government decision makers. Deputy Assistant Secretary for Asia Pamela Phan is leading the mission for the U.S. Department of Commerce, joined by U.S. Trade and Development Agency Director Enoh T. Ebong and representatives of the Export-Import Bank of the United States.
The U.S. delegation includes 12 industry-leading organizations across the renewable energy and fuels, energy storage, hydrogen, smart grid, nuclear, and liquefied natural gas (LNG) sub-sectors: Bechtel (Texas), Bloom Energy (California), Cheniere Energy (Texas), Ecoplexus (California), FuelCell Energy (California), Itron (Washington), Marquis Energy Global (Illinois), NuScale Power (Oregon), Sempra Energy (California), U.S. Grains Council (Washington, D.C.), UPC Renewables (Florida), and Westinghouse Electric Company (Pennsylvania). Collectively the companies have the potential to dramatically increase foreign investment in Indonesia’s power sector.
“The Clean EDGE Asia mission provides a timely opportunity to roll up our sleeves and discuss the expanding trade partnership between the United States and Indonesia under the Indo-Pacific Economic Framework for Prosperity [IPEF],” said U.S. Embassy Spokesperson Michael Quinlan.
To deepen U.S. economic engagement in the region, IPEF’s “Clean Economy” pillar seeks first-of-their-kind, high-standard commitments on clean energy, decarbonization, and infrastructure, and pursues ambitious targets in tackling the climate crisis. IPEF’s “Connected Economy” pillar will develop high-standard rules of the road in the digital economy, as well as seek strong labor and environment standards and corporate accountability provisions that promote a race to the top through trade.
The United States is now the fourth largest foreign investor in Indonesia, rising four spots from last year.
“American companies offer U.S. corporate excellence and values to the Indonesian market,” said U.S. Commercial Attaché Paul Taylor. “The economic benefit to our partners in the region will come through investment and trade frameworks that are inseparable from our shared principles of equality, free markets, inclusive prosperity, resiliency and mutual security.”
Two-way trade in goods between the United States and Indonesia increased last year by over 30 percent to $36 billion.
The United States is Indonesia’s second largest export market, and Indonesia enjoys a large annual trade surplus with the United States. U.S. imports from Indonesia include a high proportion of value-added products, creating broad, positive economic impact in Indonesia. These products include textiles and footwear (26.6%), agricultural goods (20.3%), and machinery and mechanical appliances (14.7%). The United States has a low weighted mean tariff rate – 1.52% in 2020. Half of industrial (non-agricultural) goods enter the United States duty-free.
IPEF is a 21st century economic arrangement designed to tackle 21st century economic challenges ranging from setting the rules for the digital economy to ensuring secure and resilient supply chains to managing the energy transition to investing in quality, modern infrastructure. It reflects the full regional diversity of the Indo-Pacific, with members from Northeast and Southeast Asia, South Asia, Oceania, and the Pacific Islands.