Trade experts tell Jakarta to fix its own rules before approving the US deal

Six months after Indonesia signed the Agreement on Reciprocal Trade with the United States, parliament still has not ratified it, meaning it has not given the approval that makes the deal binding. Three specialists write in Fulcrum that the delay is worth using well. Deasy Pane, an economist at the planning agency BAPPENAS, sets out what the deal was really for: 54 per cent of all the duties Indonesian exporters paid in the United States last year came from clothing and footwear alone. Those two industries employ a lot of people, and after Washington's tariff wave the average duty on Indonesian goods jumped from about 10 per cent to more than 50 per cent at its peak.

Against that, the deal delivers something narrow. The extra US tariff came down to 19 per cent, just under Vietnam's 20, and 1,819 product lines were exempted from the additional levy. Textiles get in through tariff-rate quotas, which means a set volume enters at the low rate and anything above it pays full price, and part of that quota is tied to Indonesian factories buying American cotton and other inputs. Pane's point is that Indonesia came to the table with one sector's problem while the United States brought a full agenda: data flows, digital services taxes, intellectual property, state companies, export controls, and a clause allowing the deal to end if Indonesia signs another trade agreement Washington judges harmful to its interests.

The three disagree on what to do next. Iman Pambagyo, formerly Indonesia's ambassador to the WTO, says reform first and ratify later, because the cleaner licensing and steadier rules the deal asks for are things businesses have wanted for years and Indonesia should do for itself. Arianto Patunru of the Australian National University warns that waiting will not buy much clarity, since American protectionism survived the change from Trump to Biden and back. He prefers conditional ratification with review clauses and parliamentary scrutiny, and with ASEAN and RCEP commitments kept above the bilateral ones. Fresh US investigations into forced labour make his other point for him: the deal does not shield exporters from the next American measure.

Why it matters

Roughly a quarter of what Indonesia sells to the United States is clothes and shoes, so the workers in those factories carry the real risk in this argument, and they gain nothing if ratification is delayed forever either. Watch what the DPR attaches when the bill finally moves: review clauses and a sunset date would keep the deal reversible, while a clean yes locks in rules on digital taxes and licensing that reach well past the tariff problem it was meant to solve. The digital clauses in particular decide whether Indonesia can tax foreign platforms the way it planned.