Jakarta. ASEAN chair Indonesia is nudging the US into including market access for critical minerals under the Washington-led initiative Indo-Pacific Economic Framework for Prosperity or IPEF, according to Foreign Minister Retno Marsudi.

Jakarta on Wednesday hosted its 11th summit with Washington – a meeting that US President Joe Biden decided to skip and sent his veep Kamala Harris instead.

Indonesia took the opportunity to bring up the IPEF of which six other ASEAN member states including the nickel-rich Philippines.  The IPEF is an international cooperation aimed at building a resilient economy, although it is not a traditional free trade agreement (FTA) that gives tariff reductions.

At the 11th ASEAN-US Summit, Jokowi said he wanted the IPEF framework to also include critical minerals. 

“Mr. President said that the US-initiated IPEF must be inclusive and mutually beneficial, including opening up market access for critical minerals,” Retno told reporters in Jakarta following the ASEAN-US Summit.

Jokowi had a brief bilateral meeting with Harris shortly before the ASEAN meeting. Critical minerals were high on the agenda during the bilateral talks, an unsurprising move given how Indonesia has been trying to build its electric vehicle (EV) battery ecosystem.

“The bilateral meeting discussed, among others, the establishment of a critical minerals agreement,” Retno said without going into details.

The IPEF represents over 40 percent of the world’s gross domestic product and 28 percent of global trade. The IPEF has seven ASEAN countries as members, namely Indonesia, Philippines, Brunei Darussalam, Malaysia, Singapore, Vietnam, and Thailand.

Other members include Australia, Fiji, India, Japan, South Korea, and New Zealand. The IPEF has four pillars, namely: trade, supply chains, clean economy, and fair economy. 

The Indonesian government is hoping that its processed critical minerals will be eligible for the clean vehicle tax credit under the Inflation Reduction Act (IRA).  Under the IRA, EV buyers are eligible for tax credits of up to $7,500 if a certain percentage of the vehicles’ components use critical minerals extracted or processed in the US or the country’s FTA partners. Indonesia does not have an FTA with the US.

Earlier this year, Chief Economic Affairs Minister Airlangga Hartarto attended an IPEF-related ministerial conference during which he proposed the critical minerals to be included in the IPEF’s trade pillar negotiations. According to a ministerial press release, the seven ASEAN countries, along with the lithium-abundant Australia, agreed to the proposal.