China's Response: Bakom Affirms Indonesia-US Trade Agreement Subject to National Interest

Jakarta - Senior expert at the Government Communications Agency (Bakom RI), Fithra Faisal Hastiadi, has stated that Article 5.1 of the reciprocal trade agreement (Agreement on Reciprocal Trade/ART) between Indonesia and the United States remains subject to Indonesian national interests.

Fithra, in a statement issued in Jakarta on Wednesday, clarified that this provision means Indonesia is not automatically compelled to follow US trade policies towards other countries.

Fithra’s statement responds to the Chinese government’s concerns regarding the Indonesia-US reciprocal trade agreement, particularly concerning provisions whereby Indonesia would implement the same import restrictions as the US against other trading partners.

The provision is contained in Article 5.1 of the Agreement on Reciprocal Trade, which states: “If the US imposes duties, quotas, prohibitions, charges, levies, or other import restrictions on goods or services from third countries and considers such actions relevant to protect economic or national security, the US shall notify Indonesia of such actions for purposes of economic and national security adjustment, and Indonesia shall adopt or maintain measures with restrictive effects equivalent to those adopted by the US.”

Fithra explained that the provision is fundamentally intended to prevent practices such as transhipment and similar issues.

“In those provisions outlined in 5.1, for instance if the US applies tariffs, quotas, sanctions, or anything against certain countries, and notifies Indonesia, Indonesia should follow suit to align with the US, and the purpose is essentially to avoid things like transhipment or similar practices. That’s actually the US motivation there,” Fithra said.

However, he emphasised that subsequent clauses contain provisions stating that the implementation of such policies remains dependent on Indonesian national interests.

“But on the other hand, if we look at 5.2 or 5.3, it is subject to national interest. So in this case, we have an escape clause,” he stated.

According to Fithra, Indonesia’s national interests encompass maintaining good relations with various partner countries, including China, so the implementation of ART provisions remains mindful of wider diplomatic and economic considerations.

“That’s also part of national interest, which is something that can be discussed further,” he said.

Additionally, Fithra mentioned that a Council on Trade and Investment will be established as a forum to discuss various trade and investment issues, including possible adjustments if policies are deemed to harm national interests.

“The Council on Trade and Investment is for discussions on matters such as when the trade balance becomes imbalanced, these can be discussed again,” he stated.

Thus, Fithra believes that Article 5.1 of the ART does not eliminate Indonesia’s policy flexibility, as there remain safeguard mechanisms and discussion spaces to protect national interests.

“It is not impossible that other matters considered to harm our national interests can be discussed in this forum for renegotiation,” he concluded.