Jakarta. A minister recently said that Indonesia had been struggling to seal a trade deal with an unnamed country, citing that the latter did not wish to risk further imbalance.

Indonesia has been negotiating trade pacts to make sure that its goods are more competitive in global markets. Trade Minister Budi Santoso told a forum on Thursday that an unnamed country had been putting off a deal with Jakarta due to its trade deficits with Indonesia.

“We have a unique experience when trying to strike a trade deal with another country. We have already made a joint commitment to finalize the pact, but they kept on delaying it. Why? Because they run a deficit with Indonesia, and so they told us to put it on hold for the time being. They fear that their deficit will worsen if they proceed,” Budi said in Jakarta.

He added: “So I told them that we are not here negotiating a trade pact to make you suffer a deficit. If that’s our intention, then that’s called a trade war. This pact will enable you to have market access to our country and vice versa.”

A trade agreement slashes barriers to exports and imports by reducing or eliminating tariffs. For instance, Jakarta's comprehensive economic partnership agreement with Australia has allowed virtually all of Indonesia's exported goods to enjoy zero tariffs, thus enhancing their competitiveness in the close neighbor.

Later that day, Budi spoke to reporters over his statement in a doorstep interview. 

“It’s not that they don’t want to have the agreement, but it’s just that they have been delaying it. … But once again, a trade deal seeks to be mutually beneficial. We already have 19 agreements in effect, and 10 others are in the ratification process,” he explained.

The Jakarta Globe asked Budi if he was referring to the United States as Indonesia inched closer to the July 9 tariff talks deadline, but he did not respond to the question. 

Indonesia’s Biggest Surplus Drivers
The Central Statistics Agency (BPS) recently named the US, India, and the Philippines as the top three of Indonesia’s surplus contributors.

In the first five months of 2025, the US contributed $7.08 billion to Indonesia’s overall surplus, up from the $5.37 billion recorded a year earlier, followed by India ($5.30 billion) and the Philippines ($3.69 billion). 

Indonesia is currently trying to convince the US to bring down its upcoming 32 percent tariffs. Jakarta has proposed $34 billion worth of imports and investment plans by the sovereign fund Danantara as a more “long-term solution” to the trade imbalance, according to senior minister Airlangga Hartarto. 

Jakarta has established a free trade agreement with India under the ASEAN framework. The same goes for the Philippines. Indonesian enterprises can enjoy tariff eliminations when exporting to the Philippines thanks to the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trading bloc that brings together all ASEAN members, China, Australia, New Zealand, South Korea, and Japan. India was supposed to be part of the RCEP, but decided to opt out due to concerns over an influx of Chinese imports.

It took Indonesia years to finally make meaningful progress in the CEPA negotiations with the European Union (EU). The talks officially began in 2016. The Indonesian government announced last month that the negotiations had entered their final stage. Government data showed that Indonesia’s surplus with the EU had almost doubled from $2.5 billion in 2023 to $4.5 billion the following year.

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