Diplomacy on the Sidelines: Jokowi at the G-20 Summit

12 July 2017 Jarryd de Haan, Research Analyst, Indian Ocean Research Programme

Background

Indonesian President Joko “Jokowi” Widodo represented his country at the 2017 G-20 summit held in Hamburg on 7-8 July. The three main topics of the summit included building resilience, improving sustainability and assuming responsibility. In addition to the G-20 members were guest observers Guinea, Netherlands, Norway, Senegal, Singapore, Spain and Vietnam. During the summit, Jokowi held a number of bilateral meetings with attending leaders.

Comment

On the sidelines of the G-20, in a public meeting with United States President Donald Trump, Jokowi invited Trump to visit Indonesia, noting the success of Vice-President Mike Pence’s visit in April this year. If Trump does visit, it is possible that it will take place during his trip to the Philippines which is expected to be sometime in November, although no official date has been confirmed. Judging by comments made in the meeting by Trump, it is likely that the future visit will touch on trade and the strengthening of economic relations. Specifically, Trump noted that ‘We have our whole trade delegation here, and we will start doing a lot of trading with Indonesia. We do very little business, relatively, now. But we are going to do a lot of business.’ As of 2016, the US is Indonesia’s sixth-largest source of foreign direct investment (FDI) and fourth-largest trading partner. From the perspective of the US, however, Indonesia is the twenty-seventh largest trading partner with inward and outward FDI accounting for 0.23% of all US investment flows. Trump’s “America First” policy, in addition to his pulling out of the Trans-Pacific Partnership trade agreement, however, could become a roadblock to stronger economic ties. Behind closed doors, both parties further discussed trade as well as defence co-operation and security.

In a more casual setting, Jokowi met with Australian Prime Minister Malcom Turnbull at a hotel where Turnbull was staying before moving to the summit location. Both leaders discussed the progress of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) as well as the strategic partnership between the two countries. Indonesian Foreign Minister Retno Marsudi, who also attended the meeting, added that:

Both leaders continued to push forward for the negotiations to be completed by the end of 2017… So, if, God willing, CEPA can be completed in 2017, the Strategic Comprehensive Partnership between Indonesia and Australia will be launched in 2018.

As noted in a previous Strategic Weekly Analysis, The IA-CEPA is significant in both an economic and political sense as Australia’s first free trade agreement in what might be called the “Trump anti-FTA era”. The most recent round of negotiations took place in May this year.

Jokowi also met with the leaders of a number of European countries, including Spain, Netherlands and Norway. During each of these meetings, Jokowi brought up the issue of palm oil exports. Specifically, in speaking to Dutch Prime Minister Mark Rutte, Jokowi expressed his concern surrounding campaigns against palm oil in Europe, adding that, ‘Recently, the European Parliament determined a resolution on palm oil and deforestation. Indonesia’s explanation before the resolution was completely ignored’. The European Parliament adopted the resolution in April this year, which calls for a single certification scheme for palm oil entering the European Union market as part of an effort to curb deforestation and illegal logging. Palm oil exports are a significant factor in the Indonesian economy, being valued at $20.3 billion in 2015 and accounting for 13.5% of all exports in terms of monetary value. Already, however, in the Netherlands alone, the value of palm oil exports in 2015 fell by over seven hundred million dollars from $1.6 billion in 2012. Consequently, Jokowi will continue to campaign for the Indonesian palm oil industry.

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