Muhammadiyah Policy Paper: Trade Agreement Between Indonesia and the US Creates Obligations Imbalance

A policy paper by the Center for Public Policy and Social Justice (LHKP) of Muhammadiyah’s Central Executive Board states that the reciprocal trade agreement between Indonesia and the United States creates an imbalance of obligations.

The agreement, titled “Agreement Between The United States of America and The Republic of Indonesia on Reciprocal Trade,” was signed by President Prabowo Subianto and US President Donald Trump on February 19, 2026.

In the policy paper reviewed by Tempo on May 17, 2026, LHKP PP Muhammadiyah argues that international trade should be fair and reciprocal in substance, not just in form. The principle of reciprocity in international trade law cannot be interpreted textually if it results in an imbalance of obligations and responsibilities.

The policy paper, written by David Efendi, Wahyu Perdana, and Parid Ridwanuddin, concludes that the analysis shows that the agreement regulates not only tariff liberalization but also delves into domestic regulations, including technical standards, digital governance, investment regimes, and security policies.

“Quantitatively, the dominance of obligations on Indonesia, which is more than 90 percent, confirms a significant normative asymmetry and narrows the policy space at the national level in various strategic sectors,” the policy brief states.

The imbalance of obligations was identified through an operational phrase unit approach, where each normative statement containing “shall,” “shall not,” “may,” and “recognizes” is counted as one operative clause, whether directed to Indonesia or the United States, even if it is in the same paragraph.

Furthermore, LHKP PP Muhammadiyah uses a content-based thematic coding approach, which involves verbatim reading of all clauses, identification of substantive keywords (SPS, halal, TRQ, export controls, labor, environment, IPR, tariff, digital, investment), and grouping based on major policy domains. “If a clause contains several issues, it is categorized under the domain with the dominant regulatory impact,” the paper states.

LHKP PP Muhammadiyah is one of 79 civil society organizations that rejected the trade agreement between Indonesia and the United States and Indonesia’s involvement in the Board of Peace (BOP) on March 1, 2026.

In a petition titled “Fighting Neo-Imperialism,” the coalition argues that there is an imbalance in the RI-US trade agreement. They state that Indonesia is required to meet 214 provisions, while the United States only has nine provisions.

Several issues are being questioned, including zero tariffs for goods from the US, data protection issues, special halal certification exemptions, and potential exploitation of the mining sector. The coalition also believes that the agreement could limit Indonesia’s ability to join other economic blocs that do not align with US interests.

The coalition also questions Indonesia’s involvement in the BOP charter signed in Davos. They believe that the BOP in question does not refer to UN Security Council Resolution 2803, especially regarding the mandate for resolving the Palestinian issue.

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Dinda Shabrina contributed to the writing of this article.