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Viewing cable 07JAKARTA2433, AMBASSADOR AND TRADE MINISTER SPEAK ON

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Reference ID Created Released Classification Origin
07JAKARTA2433 2007-09-04 10:16 2011-08-24 01:00 UNCLASSIFIED Embassy Jakarta
VZCZCXRO7329
RR RUEHCHI RUEHDT RUEHHM
DE RUEHJA #2433/01 2471016
ZNR UUUUU ZZH
R 041016Z SEP 07
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 6062
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHBJ/AMEMBASSY BEIJING 4269
RUEHBY/AMEMBASSY CANBERRA 1104
RUEHDT/AMEMBASSY DILI 0867
RUEHUL/AMEMBASSY SEOUL 4164
RUEHKO/AMEMBASSY TOKYO 0732
RUEHHK/AMCONSUL HONG KONG 2367
RUEHJS/AMCONSUL SURABAYA 1921
RUEAIIA/CIA WASHDC
RUQODAZ/CARIBROC KEY WEST FL
RHHJJPI/PACOM IDHS HONOLULU HI
RUCPDOC/DEPT OF COMMERCE WASHDC
UNCLAS SECTION 01 OF 02 JAKARTA 002433 
 
SIPDIS 
 
SIPDIS 
 
FOR EAP/MTS; EB/TPP/IPE; EB/TPP/BTA; EB/TPP,PA 
COMMERCE FOR 4430/ BERLINGUETTE 
COMMERCE PASS USPTO JNESS 
DEPT PASS USTR FOR DKATZ, RBAE 
 
E.O. 12958: N/A 
TAGS: ETRD EINV ECON BEXP ID
SUBJECT: AMBASSADOR AND TRADE MINISTER SPEAK ON 
U.S.-INDONESIAN TIES 
 
REF: A. JAKARTA 2188 
 
     B. JAKARTA 2351 
 
JAKARTA 00002433  001.2 OF 002 
 
 
1.  (U)  SUMMARY: Ambassador Hume and Minister of Trade Mari 
Pangestu made public remarks on U.S.-Indonesian relations 
before an audience of Indonesian business leaders on August 
30th.  Ambassador Hume described a strategy for understanding 
the broader U.S.-Indonesian relationship in the context of 
three themes: reform, security and "connections."  Pangestu 
spoke positively of Indonesia's trade relationship with the 
United States and called for increased bilateral trade 
missions.  Pangestu also expressed her views on prospects for 
a Bilateral Investment Treaty (BIT) and outlined her 
"building block" approach toward future negotiation of a 
U.S.-Indonesian Free Trade Agreement. The remarks were made 
during a reception hosted by the Indonesian Chamber of 
Commerce and Industry (KADIN).  END SUMMARY 
 
 
Finding the Strategic Center 
---------------------------- 
 
2.  (U)  Ambassador Hume outlined a framework for the 
strategic relationship between the U.S. and Indonesia.  He 
described an approach centered on three themes: reform, 
security and "connections," the last referring to Indonesia's 
relationships both regionally and within the broader 
international community (copy of the remarks submitted to 
EAP-MTS).  The Ambassador acknowledged the progress Indonesia 
has made in the years since the advent of democracy, but 
noted "there's still work to be done."  He also discussed the 
importance of security issues and affirmed U.S. commitment to 
regional security cooperation.  The Ambassador's speech 
emphasized Indonesian responsibility for identifying and 
implementing solutions to the challenges facing the country, 
but promised continued U.S. commitment and engagement to 
address these issues. 
 
 
U.S.-Indonesia FTA: "The Building Block Approach" 
--------------------------------------------- ---- 
 
3.  (U)  Dr. Pangestu referenced the recently published study 
"Toward a U.S. Indonesian Free Trade Agreement" co-funded by 
KADIN and the U.S. Chamber of Commerce and published by the 
Peterson Institute for International Economics.  She agreed 
with the study's central conclusion: while an FTA between the 
U.S. and Indonesia would be beneficial for both parties, 
Indonesia would have difficulty complying with the investment 
and intellectual property rights (IPR) provisions.  Pangestu 
outlined a "building block" strategy whereby Indonesia would 
focus on achieving measurable progress in discrete areas 
before negotiating a comprehensive trade agreement.  Pangestu 
affirmed her commitment to the U.S. Trade and Investment 
Framework Agreement (TIFA) describing it as "a good way 
forward," specifically citing the investment, services and 
IPR working groups. 
 
 
The BIT: It's Not You; It's Me 
------------------------------- 
 
4.  (U)  Pangestu was cautious about the prospects of 
negotiating a Bilateral Investment Treaty (BIT).  She 
acknowledged the BIT's "very high standards" and declared 
that Indonesia will "study in depth and explore" the issue 
before entering into negotiations.  Despite expressing 
concerns about Indonesia's readiness to commit, she described 
BIT negotiations as "a target to aim for" that would be 
considered "stage by stage," beginning with commencement of 
exploratory discussions. 
 
 
How Do We Get There From Here? 
------------------------------ 
 
JAKARTA 00002433  002.2 OF 002 
 
 
 
5.  (U)  Pangestu argued that the investment relationship 
between the U.S. and Indonesia must be developed "from both 
sides" and encouraged KADIN to organize more trade missions 
to the United States "beyond the usual stops to New York and 
Washington."  She complained that Indonesia has not yet seen 
a substantial increase in U.S. investor interest as measured 
by "actual, realized investment."  Pangestu has been 
impressed with international scholarship programs and 
contended that large number of Indonesian students studying 
in the U.S. "cements people to people relationships" and 
strengthens trade and investment ties.  Lastly, she cited 
Indonesia's strong relationship with the U.S. Chamber of 
Commerce and suggested Jakarta as the perfect home for their 
new Asian headquarters. 
HUME