Gov't Says US Trade Deal Will Boost Indonesia's Export
Jakarta. The Indonesian government reaffirmed that the US trade deal was part of Jakarta's economic diplomacy strategy to boost market access for leading commodities and address various non-tariff barriers.
Haryo Limanseto, the spokesperson for the Coordinating Ministry for Economic Affairs, said that the government had conducted internal coordination across different ministries during the negotiations. There are also lawmaking processes that the agreement has to undergo before it can enter into force. The government has to submit the document to the House of Representatives for ratification. If lawmakers' approval is not required, President Prabowo Subianto may sign a regulation.
"The agreement will take effect 90 days after both countries submit written statements confirming that all national legal procedures have been completed. Indonesia and the US have also agreed to establish a bilateral consultation mechanism to discuss issues related to its implementation," Haryo was quoted as saying in a press statement.
Under the deal, Indonesia has secured 0% tariffs on 1,819 tariff lines for important agricultural and industrial products, such as palm oil, coffee, cocoa, spices, rubber, electronic components, and aircraft components. Indonesia is getting a quota-based tariff elimination on textiles and apparel, which will benefit 4 million workers.
Haryo went on to say that the agreement does not conflict with Indonesia's independent and active foreign policy principles.
Indonesia remains committed to this doctrine as it is not tied to any particular power bloc and has full sovereignty to determine national policy, according to Haryo. He also said that Jakarta remained active in building economic ties with various trading partners. Haryo said that there was no unconditional obligation for Indonesia to adopt future US policies.
The commitments agreed upon by both parties are coordinated and encourage harmonization, with all decisions continuing through applicable domestic processes and guided by Indonesian national law and constitutional mechanisms.
"Both parties have equal rights to terminate the agreement through written notice following consultation, ensuring that all provisions in the deal remain within Indonesia's sovereignty and national interests," Haryo said.
Various domestic political dynamics in the US, including developments in the Supreme Court rulings, have been considered.
The decision to sign the deal is a strategic step to anticipate uncertainty in US tariff policy, given that tariffs remain a primary instrument in the country's trade policy. The US might even continue its tariff policies through various legal bases other than the IEEPA.
Indonesia expects the US to have other legal instruments to implement tariffs and even plans to initiate various investigations into the trade practices of its partner countries. In this context, Indonesia's position is more manageable and measurable because various issues that could potentially become the subject of investigation have been negotiated and agreed upon early within the deal's framework, according to Haryo.
"The Indonesian government will certainly continue to closely monitor the global geopolitical situation and exercise caution in proceeding with the processes required to implement the deal," Haryo said.
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