By Tom Allard
JAKARTA (Reuters) - U.S. Secretary of State Mike Pompeo on Thursday said Washington would find new ways to cooperate with Indonesia in the South China Sea and respected Jakarta's efforts to safeguard its own waters while rejecting China's "unlawful" claims in the area.
Pompeo's visit to Indonesia comes amid a five-nation swing through Asia, where he has sought to strengthen strategic and economic ties amid rising tensions between the United States and China.
In a joint news conference with his Indonesian counterpart, Retno Marsudi, he hailed Jakarta's "decisive action" to protect its sovereignty in the waters near the Natuna Islands, which China also claims as its territory.
Pompeo said China's claim was "unlawful".
"I am looking forward to co-operating together in the new ways to ensure maritime security protects some of the world's busiest trade routes," Pompeo said in a streamed news conference after his meeting with Indonesia's foreign minister.
Retno said she wanted a "stable and peaceful" South China Sea where international law is respected.
Indonesia has repeatedly turned away Chinese coast guard and fishing vessels that have entered the North Natuna Sea.
Retno said Indonesia and the United States would enhance defence cooperation by boosting military procurement, training and exercises, intelligence sharing, and maritime security cooperation in the region.
Although sharing the same position in opposing China's territorial claims in the South China Sea, Indonesian officials have expressed concern about Washington's strident anti-China policies and rhetoric alongside rising superpower tensions.
"I re-emphasized the need to pursue inclusive cooperation amidst this challenging time," Retno said. "I underlined the need for every country to be part of the solution in the collective contribution towards world peace, stability and prosperity."
This year, Indonesia rejected a U.S. request for landing and refuelling rights in Indonesia for its P-8 Poseidon maritime patrol aircraft that monitor China's military activity.
ECONOMIC COOPERATION
Retno said on Thursday she reminded Pompeo of the "free and independent" foreign policy of Southeast Asia's largest country and called for greater economic co-operation.
Indonesia's economic ties with China have increased at the same time Washington has considered downgrading Indonesia's preferential trade treatment under the Generalized System of Preferences (GSP) facility.
That review is ongoing and Retno told Pompeo that the GSP facility was important to both nations.
"I encouraged U.S. businesses to invest more in Indonesia, including for projects in the outer islands of Indonesia, such as Natuna Island," Retno added.
Next month, senior government officials say Indonesia is expected to sign the world's biggest trade pact – the Regional Comprehensive Economic Partnership - that involves Southeast Asian states and China, but not the U.S.
Pompeo said he recognised the deficit in the economic relationship of the two countries, but made no commitment to retaining Indonesia's access to the GSP facility, which gives more than 3,500 Indonesian products duty-free status.
"There should be much more investment here from the United States, especially in the digital, energy and infrastructure sectors," Pompeo said.
Pompeo also met Indonesian President Joko Widodo, commonly known as Jokowi, on Thursday, and is scheduled to make an address to an Islamic youth group.
"President (Jokowi) emphasised that Indonesia wants economic cooperation between the two countries increasing in the future, including extension of GSP facilities for Indonesia," Retno said of Pompeo's meeting with the Indonesian leader.
She added that the president urged Pompeo to "understand Southeast Asia and Southeast Asian countries so as to create peace, stability and cooperation in the region".
Before his visit to Indonesia, Pompeo visited India, Sri Lanka and the Maldives. He is scheduled to fly to Vietnam later on Thursday.