A limited free trade agreement proposed by Indonesia that will allow nickel and other critical commodities used in electric vehicle production to benefit from U.S. tax credits will be a focus of discussion between Vice President Kamala Harris and Indonesian President Joko Widodo Wednesday in Jakarta, Indonesia
“We anticipate they will discuss our efforts build resilient supply chains, including for the critical minerals required to expand our clean energy economies,” a White House official told VOA.
Harris is meeting with Widodo on the sidelines of the ASEAN summit and related meetings hosted by Indonesia.
Under its signature climate change and clean energy legislation, the Inflation Reduction Act, the Biden administration has put aside tens of billions of dollars in tax credits to spur electric vehicle manufacturing and sales. To qualify, 40% of the minerals used for battery production for electric vehicles sold in the U.S. must be extracted or processed in the U.S., or in one of its free trade partners.
The Widodo government has for months pushed Washington for a deal on critical minerals. Indonesia boasts the earth’s largest reserves of nickel, but the country’s mining and refining industry has been largely dependent on investment from Chinese companies, limiting Jakarta’s access to the U.S. market.
Harris’ visit comes at a time of heightened tensions in the region as China released its controversial 2023 territorial map that has drawn the ire of India, Vietnam, Taiwan, Malaysia and the Philippines.
Throughout her engagements in Jakarta, Harris will make clear the United States rejects China’s unlawful maritime claims and provocative actions, the White House official said.
“She will express continued support for ASEAN’s efforts to develop a Code of Conduct for the South China Sea, consistent with the U.N. Convention on the Law of the Sea, and the rights of third parties. Overall, she will make clear our belief that freedom of navigation and overflight, as well as the peaceful resolution of maritime disputes, are critical to our collective peace, stability, and prosperity – including in the South China Sea.”