RI–US Trade Deal : Expanding Access or Creating New Risks?

 By Kusnandar & Co.,  Attorneys At Law – Jakarta, Indonesia

 

The public debate surrounding the ratification of the Agreement on Reciprocal Trade (ART) between Indonesia and the United States has grown increasingly intense. What initially appeared to be a strategic economic breakthrough is now facing scrutiny from civil society, particularly the Center of Economic and Law Studies (Celios), which has formally submitted objections to President Prabowo Subianto. The concerns raised go beyond technical trade clauses; they touch on fundamental questions of economic sovereignty, regulatory authority, and democratic process.

The ART agreement is presented by the government as a significant step forward in strengthening Indonesia’s trade relations with the United States. Expanded market access, potential tariff reductions, and increased export opportunities for Indonesian goods are central to its promise. In a global environment marked by protectionism and geopolitical tension, securing preferential access to one of the world’s largest consumer markets is understandably attractive.

However, economic diplomacy must be assessed not only by its projected benefits but also by its structural implications. Celios has reportedly outlined 21 substantive objections, including concerns over increased energy imports, the relaxation of non-tariff barriers, and the possible weakening of domestic content requirements. Critics argue that such provisions may disproportionately advantage foreign producers while placing additional strain on Indonesia’s domestic industries, particularly small and medium enterprises that are less equipped to compete with large multinational corporations.

One of the core issues raised is regulatory balance. Trade liberalization, while essential for competitiveness, should not come at the expense of national policy autonomy. For example, domestic content requirements have historically been used as instruments of industrial policy to strengthen local supply chains and encourage technology transfer. If such measures are diluted without adequate safeguards, Indonesia risks reinforcing dependency rather than fostering resilience.

Another area of concern involves data governance and regulatory standards. As cross-border digital trade expands, agreements that affect data flows and regulatory recognition must be carefully aligned with national legal frameworks. Any perceived mismatch between international commitments and domestic legislation could create legal uncertainty, potentially inviting disputes and undermining investor confidence.

Beyond substance, there is also the procedural dimension. Under Indonesian law, international agreements that significantly affect sovereignty, public finance, or fundamental rights typically require parliamentary involvement. A transparent and participatory ratification process is not merely a formal requirement; it is a democratic safeguard. Broad consultation with stakeholders—ranging from industry associations to labor groups—can strengthen the legitimacy and durability of any international commitment.

This debate reflects a broader tension facing many emerging economies: how to integrate more deeply into global markets while safeguarding domestic priorities. The choice is not between isolation and openness. Rather, it is about negotiating from a position of strategic clarity. Trade agreements must serve as instruments of national development, not ends in themselves.

Constructive criticism, such as that voiced by Celios, should therefore be seen as part of a healthy democratic ecosystem. Scrutiny does not equate to opposition to trade; instead, it signals the importance of ensuring that agreements are balanced, transparent, and aligned with long-term development goals.

Ultimately, the ART agreement represents both opportunity and responsibility. If carefully calibrated, it could enhance Indonesia’s export competitiveness and strengthen bilateral ties. If inadequately scrutinized, it could generate unintended economic and legal consequences. The path forward requires not only diplomatic agility but also institutional rigor—ensuring that trade expansion proceeds hand in hand with economic sovereignty, regulatory coherence, and democratic accountability.

By : K&Co - February 25, 2026