UGM Economist: US-Iran War the Perfect Moment to Cancel ART
An economist from Universitas Gadjah Mada (UGM) in Yogyakarta, Rimawan Pradiptyo, assesses that the current heated geopolitical situation between the United States (US) and Iran presents the perfect opportunity for Indonesia to cancel the trade agreement known as the Agreement on Regulatory Transparency (ART), which was signed in February 2026.
A lecturer in the Department of Economics at the Faculty of Economics and Business, UGM (FEB UGM), he outlines several reasons why President Prabowo Subianto and the relevant ministers should promptly recognise the potential adverse impacts of this controversial agreement.
“The ART agreement has violated at least seven articles of the 1945 Constitution and threatens the sovereignty of the state,” said Rimawan in Yogyakarta on Thursday, 2 April 2026.
In his study, Rimawan found that the ART draft is not merely an ordinary trade agreement but an instrument that could transform Indonesia from a sovereign nation into one economically and legally colonised. This is evident from the 211 obligations that Indonesia must bear, including 36 asymmetric obligations that apply only to Indonesia without reciprocal commitments from the US.
“The current US-Iran war should serve as a warning to Indonesia; the scope of ART extends far beyond economic aspects but also encroaches on political, geopolitical, and national sovereignty matters,” said Rimawan.
These geopolitical tensions are highly relevant because Article 5.1 of the ART requires Indonesia to adopt trade restriction measures equivalent to US policies towards third countries.
This provision is seen as damaging Indonesia’s free and active foreign policy principles, especially since the US is currently at odds with Indonesia’s strategic partner, China, and faces rejection from the European Union regarding attacks on Iran.
Rimawan also warns of the significant risk of major retaliation from China, whose trade value with Indonesia is four times larger than that with the US or the European Union, if Indonesia submits to Washington’s dictates.
Constitutionally, Rimawan notes seven serious violations of the 1945 Constitution. Among them, Articles 6.1 to 6.2 of the ART allow US investors to own 100% shares in mining without divestment obligations, which is deemed to violate Article 33 of the 1945 Constitution regarding the state’s control over natural resources.
Additionally, Annex III Article 2.9 exempts US products from halal certification and labelling requirements, which is considered to infringe on Article 29 of the 1945 Constitution concerning religious guarantees.
The implementation of ART is also predicted to trigger a public health crisis and burden the state’s finances. Indonesia is required to import US agricultural commodities worth US$4.5 billion over five years, including Genetically Modified Organism (GMO)-based products like soybeans, which are banned in many European countries.
“This is feared to also increase the risk of various chronic diseases in the future, which must be borne by BPJS Kesehatan,” he said.
To facilitate this agreement, the government and the DPR are estimated to need to expedite the formation and revision of 117 domestic regulations, including 32 laws such as the Mining Law, the Omnibus Law on Job Creation, and the Food Law.
Rimawan assesses that Indonesia’s bargaining position to cancel the agreement is currently very strong, especially following the US Supreme Court (SCOTUS) ruling in February 2026 that revoked the authority of US President Donald Trump to unilaterally set trade tariffs through the International Emergency Economic Powers Act (IEEPA).
“All economic theories are based on the implicit assumption that their societies and nations are free. No economic theory is designed for a colonised nation,” said Rimawan.
Therefore, Rimawan recommends that the government immediately reject the ART to safeguard the nation’s dignity and sovereignty amid global uncertainties.