Heru Andriyanto, Jakarta – Indonesia's top economic minister on Monday defended a recently signed trade agreement with the United States, rejecting claims that the deal is overly favorable to Washington and poses a threat to domestic industry.
Under the agreement, Indonesia will eliminate tariffs on 99 percent of US goods, while the US will impose a 19 percent average tariff on Indonesian products – down from the previous 32 percent.
Speaking at the Investor Daily Roundtable in Jakarta, Coordinating Minister for Economic Affairs Airlangga Hartarto said the US is not the first major economy to benefit from such tariff arrangements with Indonesia.
"Due to the ASEAN-China Free Trade Agreement, more than 90 percent of Chinese products entering Indonesia have enjoyed zero tariffs since the early 2000s. The US is only getting similar access now, in 2025," Airlangga explained.
The ASEAN-China Comprehensive Economic Cooperation Framework, signed in 2002, laid the foundation for the ASEAN-China Free Trade Area (ACFTA), which came into effect in 2010. This was ASEAN's first free trade deal with an external partner, gradually liberalizing trade in goods and services between the two sides.
Airlangga stressed that the reduced tariff rate granted to the US – from 32 percent to 19 percent under the new agreement – is a significant concession. For certain commodities not produced in the US, such as crude palm oil, cocoa, and rubber, the tariff is even lower.
"In fact, every major US trading partner is dealing with a similar arrangement," Airlangga added. "Even Japan, which has pledged $500 billion in investment in the US, doesn't get zero tariffs. The only country that hasn't granted the US zero percent tariff access is China."
He also noted that the anticipated increase in Indonesian imports from the US will primarily involve staple commodities that are already routinely imported, such as wheat and soybeans.
"Indonesia has been formally engaging with the US through a comprehensive dialogue package. Washington has acknowledged us as one of the first countries to initiate such structured talks," Airlangga said.