Indonesia's Limited Benefits Under Reciprocal Trade Agreement with United States
A distinguished professor of agricultural policy economics at the Bogor Agricultural Institute (IPB), Sahara, has assessed that the scope of commitments under the Agreement on Reciprocal Trade (ART) with the United States tends to provide more structured benefits to America, whilst Indonesia’s gains are viewed as more limited and heavily dependent on specific commodities.
“The United States tends to obtain structured benefits. Indonesia obtains positive benefits, but they tend to be commodity-based,” Sahara said during a national seminar held online via Zoom on Saturday, 14 March 2026.
He explained that the United States has the potential not only to increase exports of agricultural commodities, energy, and high-value manufactured products to Indonesia, but also to secure various other commitments in areas such as digital trade, cross-border data flows, restrictions on data localisation policies, regulatory transparency, intellectual property protection, and harmonisation of strategic export controls.
Based on analysis conducted by his team, Sahara noted that Indonesia’s benefits from the reciprocal trade agreement are largely short-term in nature, whilst medium to long-term benefits accrue to the United States.
He also highlighted the potential for retaliatory measures from other nations resulting from the trade agreement. Consequently, Sahara assessed that the ART still warrants ratification, but with caution in its implementation. According to him, the Indonesian government must ensure that market access gains are converted into sustainable industrial transformation whilst maintaining economic sovereignty.
Sahara cited one issue requiring attention as the potential elimination of non-tariff policies, such as domestic content requirements (TKDN). Should such policies be abolished, he argued, the impacts on domestic industries must be considered, including the possible risk of deindustrialisation.
He also raised concerns about the future of Indonesia’s certification and assurance services sector. According to him, this sector plays a critical role in consumer protection, including ensuring that products on the market meet established standards. One example he cited was halal certification standards.
Sahara explained that Indonesia’s halal standards could potentially differ from those in other countries, including in animal slaughter methods or the pre-slaughter stunning process. For this reason, he concluded that Indonesia’s certification bodies have an important role in ensuring that products on the market truly comply with standards applicable in the country.
Additionally, he argued that the entry of agricultural products from the United States into the Indonesian market requires comprehensive examination, relating to the sustainability of food self-sufficiency programmes, shifts in trade patterns, and the potential for retaliation from other nations.