Deni Ghifari, Jakarta – Talks between Indonesia and the United States remain in limbo just days ahead of a deadline both parties set for reaching a trade deal to avert punishing US import tariffs that would effectively shut off the world's largest consumer market for many Indonesian products.

Asked where the negotiations currently stood, Edi Prio Pambudi, an undersecretary at the Office of Coordinating Economy Minister, told The Jakarta Post on Wednesday that Indonesia "is awaiting America's response".

Wednesday marked the 50th day since Coordinating Economy Minister Airlangga Hartarto said on April 18 that both sides had agreed to conclude the negotiations within 60 days.

The minister made that announcement from Washington, DC, as he helmed a delegation dispatched to initiate the talks with the administration of US President Donald Trump.

Airlangga was accompanied by high-ranking government officials who met with their US counterparts from April 16 to 25 with the main goal of forestalling steep US import tariffs imposed on Indonesian export goods and getting a "fair and square" trade relationship.

A 32-percent so-called "reciprocal" tariff on Indonesian goods went into effect on April 9 but was suspended hours later for 90 days to open time for bilateral talks.

Edi said the two sides had engaged in dialogue to follow up on the initial Indonesian trade mission but admitted the previously agreed 60-day target to wrap up those talks was uncertain, as "Who can guess what President Trump might do?"

"Let's wait; the US is the one to decide the time limit. The ball is in their court," said Edi, who is in charge of coordinating economic cooperation and investment at the coordinating minister's office.

Washington has pointed to its trade deficit as justification for double-digit tariffs placed on goods from dozens of countries.

President Prabowo Subianto said on April 7 that the archipelago was ready to import an additional US$18 billion worth of American-made products to balance out bilateral trade, which is the amount by which Indonesian exports to the US exceeded its imports from the US.

This promise became a centerpiece of the possible concessions the Indonesian delegation brought to the negotiation table.

Jakarta also proffered exclusive tariff cuts for US goods and a deregulation package aimed at improving the business landscape for US companies in Indonesia, such as by relaxing local content requirements and removing import quotas for select commodities.

The Indonesian side also presented a prospective $2 billion corporate investment in a blue ammonia project in the US state of Louisiana as part of a "win-win solution" in the trade negotiations, even though that investment would come from Indorama, a private company rooted in Indonesia.

On April 25, the final day of his visit, Airlangga said Washington appreciated "the strategy and approach as well as the proposals put forward by Indonesia".

He added that the archipelago had managed to catch the US's attention at a time when dozens of other countries were also seeking the Trump administration's ear in their own efforts to maintain access to the US market.

However, Jakarta has been mute about the state of the negotiations ever since, and the two sides have not yet reached. In contrast, the United Kingdom, the one country that has managed to bag a tariff deal with the US, secured its agreement just a month after Trump issued the reciprocal tariffs.

With the 90-day suspension, the tariffs will resume on July 9, leaving less than a month for countries to negotiate.

Economist Intelligence Unit (EIU) analyst Wen Chong Cheah told the Post on Wednesday that trade negotiations had moved very slowly so far even among the US's prioritized trade partners. "We don't think a trade agreement with Indonesia can be reached before the [90-day] deadline," he said.

He continued, "the delay suggests Indonesia is not a current priority," especially "if the US is focused on larger geopolitical or trade wins," a deal with Jakarta might be less urgent.

However, Cheah predicted that the US would ultimately opt to extend the pause and commended Jakarta's strategy of pursuing other trade agreements, such as with the European Union, which would help "mitigate the effects of diminished trade with the US".

Muhammad Habib, an economic researcher from the Centre for Strategic and International Studies (CSIS) in Jakarta told the Post on Wednesday if Washington ultimately proceeded with imposing the 32 percent reciprocal tariffs on Indonesia, it would likely also impose the reciprocal tariffs on other countries.

"I suspect scrapping all the tariffs will only happen if the administration loses legal battles at the [...] Supreme Court," Habib said.

"We should be flexible in our position but firm in our principles. In certain points, I agree we need to offer concessions, but we must be clear first about what we want from the US, what our principles are and what the limits of our offers are," he added.

Habib went on to say that the silver lining to a scenario where other countries gained the same or more than Indonesia in the negotiations was that it must double down efforts to improve its trade, industry, investment and innovation ecosystem, since "our competitiveness begins at home".

Source: https://asianews.network/indonesia-us-trade-negotiations-in-limbo-as-deadline-nears