Government Optimistic About US Trade Investigation, Indonesia Remains Committed to ART Agreement
Indonesia’s government remains optimistic about the trade investigation process being conducted by the United States government, according to Haryo Limanseto, spokesperson for the Coordinating Ministry of Economic Affairs.
Haryo stated that the Indonesian government has already communicated with the United States Trade Representative (USTR) regarding the investigation policy, which also involves several other countries.
“The Indonesian government has confirmed with the USTR regarding this policy and its follow-up. In principle, this is a legal and administrative process that the American government must go through,” Haryo said when met at the Coordinating Ministry of Economic Affairs office in Jakarta on Friday, 13 March.
He explained that the investigation also involves several countries that maintain trade relationships with the United States. However, Indonesia is considered to hold a stronger position because it has concluded a trade agreement through the Agreement on Reciprocal Trade (ART).
“We continue to follow the investigation process alongside other countries, but Indonesia remains committed to the ART. We have been negotiating for quite some time, almost about a year,” he explained.
According to Haryo, the Indonesian government will also provide various data needed in the investigation process to clarify the actual state of trade conditions.
He argued that the issue regarding excess manufacturing production capacity, cited as one reason for the investigation, is not intentional on Indonesia’s part, but rather part of the dynamics of global business.
“The excess production is not intentional, but rather due to the business process—the product becomes surplus. Matters like these have actually already been discussed in the ART,” said Haryo.
Nevertheless, he emphasised that the government continues to pursue the ratification process of the agreement domestically, including through consultations with the House of Representatives.
“We remain committed to the ratification process. The process is underway in Indonesia, but in their country it is not so straightforward because there is the Supreme Court and they must follow a longer timeline—from 122 to 150 days and then to 301 days—they must investigate first before it can be accepted. After that, if it is accepted, Indonesia will use the ART. That is the hope, so we cannot move forward alone because there are turbulences in America itself,” he said.
He emphasised that the government remains optimistic that the investigation process will proceed smoothly and will not disrupt the trade relationship between the two countries.
“We are optimistic because most of the issues have already been discussed in the ART. So this investigation is more of an administrative process that must be followed,” he said.
According to Haryo, the ART agreement reached previously is the result of a compromise that benefits both countries mutually.
He also assessed that the trade relationship with the United States is very important for Indonesia, given that the country is one of Indonesia’s main export destinations.
“The United States is Indonesia’s second-largest export destination. For this reason, we chose a negotiation path that is mutually beneficial,” he said.
Haryo added that under the agreement, Indonesia also gained the benefit of reduced tariffs on imports to the American market, currently in the range of 15 per cent.
The government hopes that these tariffs can be maintained after the investigation process is completed, whilst other countries that do not have similar agreements may face higher tariffs.