Ruth Dea Juwita, Jakarta – Trade negotiations between Indonesia and the United States remain ongoing, the government insists, seeking to dispel reported US concerns over the implementation of a handshake deal agreed in July.
"There are no specific issues with the discussions, and normal dynamics are part of the process," a spokesman for the Office of the Coordinating Economy Minister, Haryo Limanseto, told The Jakarta Post on Wednesday.
The statement comes after several media reports, citing growing frustration in Washington, suggested talks on a bilateral trade agreement were in danger of collapsing.
The deal with Indonesia could be at risk, because Jakarta reportedly backtracked on several commitments, "reneging" on what the two countries had agreed, Reuters reported on Wednesday, citing a US official who spoke on condition of anonymity.
US officials now believe Indonesia is "backsliding" on agreements to eliminate nontariff barriers on American industrial and agricultural exports as well as on digital trade issues, the Financial Times reported on Wednesday.
The two sides are also clashing over an effort by the US to include clauses Indonesia sees as infringing on its economic sovereignty, according to the FT.
The US Embassy in Jakarta declined to comment. The US Trade Representative (USTR) did not immediately respond to the Post's request for comment.
In July, the two countries said Indonesia had agreed to eliminate import tariffs on 99 percent of US goods under "a joint statement" on a "framework" for a trade agreement, alongside plans to buy some US$19 billion worth of US products.
In return, the US slashed its so-called "reciprocal" tariff on Indonesian goods from 32 percent to 19 percent, with possible further cuts for select commodities "not naturally available or domestically produced in the United States".
In the negotiations with Washington, Jakarta has sought to secure tariffs of zero percent on key commodities including palm oil, coffee and downstream mineral products, with Coordinating Economy Minister Airlangga Hartarto saying the government hoped to seal a final agreement this year.
Airlangga is expected to meet USTR head Jamieson Greer later this week.
Anne Patricia Sutanto, who heads the trade affairs division at the Indonesian Employers Association (Apindo), said Indonesia "must ensure" the deal, while intended to address a US trade deficit, remained anchored within a trade-and-investment framework and "must not get caught in handshake traps."
The government had been "deliberate and cautious" in dealing with Washington, she told the Post on Wednesday, a stance she said was broadly supported by domestic industry.
"The deal should stay focused on trade and investment between the two countries, not drift into areas unrelated to that mandate," Anne said. "If the USTR wants to go beyond that scope, they should respect Indonesia's Constitution, its sovereignty as well as the WTO framework."
Indonesia, she added, operated under a rules-based multilateral system and had existing WTO-consistent trade commitments that "cannot simply be overridden."
"We need to understand what the US is asking for," she noted, pointing to the USTR's push for terms similar to those it pursued with Malaysia. "Look at what's happened there", she cautioned, suggesting that rushing the deal could trigger a public and political backlash.
Washington added "poison pill" termination clauses to trade pacts with Malaysia and Cambodia signed in late October, as it threatened to scrap the deals if either country signs agreements deemed to undermine "essential US interests" or "poses a threat" to US security, the FT reported last month.
The Malaysia deal had drawn criticism from lawmakers and civil-society groups over concerns about sovereignty and legal safeguards.
Muhammad Habib Abiyan Dzakwan of the Centre for Strategic and International Studies (CSIS) in Jakarta told the Post on Wednesday that Indonesia "was right" to prioritize "prudence, presence and patience" in its negotiations with Washington.
"We should not rush for the sake of optics [...] and must ensure Indonesia offers concessions only in proportion to what is appropriate," said Habib.
"Indonesia also must not be pushed into commitments that conflict with its sovereignty, its free-and-active foreign policy doctrine or international norms," he added.
Prabowo visits Russia
Fresh from a two-day visit to Pakistan, President Prabowo Subianto on Wednesday headed to Russia for a state visit Jakarta had not announced in advance.
He arrived in Moscow at midday for talks with Russian President Vladimir Putin.
Welcoming Prabowo ahead of the closed-door talks, Putin in a statement offered his condolences over the Sumatra floods and said he was looking forward to discussing a plethora of bilateral issues, including nuclear power generation in energy cooperation, industrial cooperation, agriculture and military-technical ties.
Trade between the two countries this year had seen "rapid" growth of 17 percent, Putin highlighted, adding that Moscow was ready to provide experts and technical professionals to support Jakarta's development ambitions.
Prabowo thanked Putin for receiving him despite the "very short notice", explaining that he sought "consultations" with the Kremlin leader while "seizing opportunities" for cooperation.
He also invited Putin to Indonesia: "Maybe it could happen in 2026 or 2027. [...] India should not be the only country you travel to with pleasure."
The International Criminal Court (ICC) issued an arrest warrant for Putin in 2023 over alleged war crimes in Ukraine, though Indonesia is not a member.
The visit marks Prabowo's third meeting with Putin in Russia. The first was as president-elect in July last year, and the most recent was six months ago when Prabowo attended the St. Petersburg International Economic Forum.
The President's visit comes two days after Industry Minister Agus Gumiwang Kartasasmita arrived in Monday for a business-matching forum and talks with counterpart Anton Alikhanov.
The talks secured two memorandums of understanding (MoUs), one on training for handling asbestos and another on shipbuilding cooperation, the Industry Ministry said in a statement.
Source: https://asianews.network/indonesias-trade-deal-with-us-still-on-despite-reported-rift