USTR Schwab and Indonesian Trade and Forest Ministers Sign Agreement on Illegal Logging as Part of Effort to Deepen Trade and Investment Relations

United States Trade Representative Susan C. Schwab and Indonesia's Minister of Trade Mari E. Pangestu and Minister of Forestry M.S. Kaban today signed a bilateral agreement to enhance joint efforts between the two countries to combat illegal logging and associated trade.

“A core part of our international trade agenda must be combating illegal trade, including protecting endangered species.  Today's agreement with Indonesia constitutes a new model for international engagement in this area,” Ambassador Schwab said.  “The United States and Indonesia are partnering to combat illegal logging and the trade associated with it. The United States has already committed one million dollars to fund start up activities under this initiative and we are looking forward to the opportunity to strengthen our cooperation with Indonesia on this important issue.”

The MOU envisions ongoing action between U.S. and Indonesian authorities to share information on timber trade, including information on illegally-produced timber products, and cooperation in law enforcement activities.  The $1 million the United States has committed immediately is to fund initial supporting projects, such as remote sensing of illegal logging activities and enhancing partnerships with NGOs and the private sector.

This agreement is the first of its kind for both countries.  The agreement is designed to promote forest conservation by combating illegal logging and associated trade, and to help ensure that Indonesia's legally-produced timber and wood products continue to have access to markets in the United States and elsewhere.

This new agreement is an element of President Bush's global Initiative to Address Illegal Logging that was launched in 2003.  In order to guide implementation and identify priority actions that both countries will undertake, the agreement establishes a working group under the existing U.S.-Indonesia Trade and Investment Framework Agreement (TIFA). 

The agreement is one of several important initiatives the United States is carrying out under this bilateral trade and investment dialogue to help support Indonesia's efforts to strengthen that country's investment climate.  It is part of a broader effort to deepen the United States' economic relations with this important country, and with Southeast Asia as a whole.  

The signing of this agreement took place on the margins of the Asia Pacific Economic Cooperation (APEC) meetings in Hanoi.   Ambassador Schwab and Minister Pangestu also discussed stalled WTO Doha Round negotiations and a wide range of bilateral issues, including agriculture trade, investment, and intellectual property rights.  In addition, they exchanged views on the Indonesian government's ongoing anti-corruption campaign, which the U.S. Government strongly supports.

Background

This United States-Indonesia agreement on joint action on illegal logging will build on existing Indonesian efforts to combat illegal logging and to restructure its forest sector.  It will help ensure that Indonesia's legally produced timber and wood products have continued access to U.S. and other international markets. The United States is focusing this effort on Indonesia because of the importance of bilateral trade in forest products and because Indonesian forests and their biodiversity present a significant conservation opportunity.  In addition, Indonesia has demonstrated a strong political commitment to addressing the problem and has asked for the United States to partner with it on this important effort.

In addition to the illegal logging agreement, the TIFA dialogue has also resulted in other notable recent achievements, including an agreement signed in September on cooperation to stop illegal transshipments of textiles and apparel through Indonesia to the United States.  The TIFA dialogue has also fostered enhanced cooperation on the enforcement of intellectual property rights, which led to a U.S. Government decision announced earlier this month to improve Indonesia's standing on the Special 301 Watch List.  

Two-way trade between the United States and Indonesia totaled $15.1 billion in 2005, up 11.8 percent over the previous year. Indonesia is part of the ten-member Association of Southeast Asian Nations (ASEAN), which collectively is the fourth largest market for U.S. exports. With continued strong economic growth anticipated in ASEAN countries and a regional population of about 500 million, the United States anticipates significant future trade and investment opportunities for U.S. companies in this region.