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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

November 13, 2012 at 10:30 AM

Indonesia, Washington and ‘free trade’

The Seattle Times’ Kyung M. Song reports that Indonesia has effectively barred apple imports, a blow to Washington’s largest cash crop. The official reasons cited are new inspection and labeling rules, but this is a prime example of the stealth protectionism that hurts American exports around the world.

Indonesia doesn’t produce any significant quantities of apples, so it is not protecting domestic farmers a la Japan. This is part of a broader trade problem: Last year, Secretary of State Hillary Clinton noted on a visit there that trade between the United States and Indonesia had surpassed $20 billion, but was only half that of much less populous Malaysia. Indonesia’s economy has been struggling with lower demand in the weak global economy and its trade deficit hit a record last summer.

Global Trade Alert, a London-based think tank, notes that protectionism is on the rise because of the lingering economic crisis. Even advanced nations are doing it — and many jobless Americans would like to see more done — although Argentina ranks high as protectionist and China’s many stealth measures continue. In hard times, the World Trade Organization isn’t working out as promised in good times.

It’s also important to note that Indonesia, with a population of 249 million, fourth largest in the world, means more to Washington than apples. The state exported more than any other to Indonesia in 2011, nearly $1.6 billion vs. $301 million in 2005. While agriculture comprised nearly 31 percent, transportation equipment (jets) was 60 percent. Last year, Boeing won its largest order for commercial airliners, list price totaling $21.7 billion, from Indonesia’s Lion Air.

Even with the apple problem, Indonesia remains critical to Washington’s economy.

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Defenestration

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