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Indonesia

Indonesia signed a major comprehensive FTA with Japan in 2007. In February 2012, it signed a preferential trade agreement with Pakistan which the two governments intend to turn into an FTA. But the Pakistan government has reportedly refused to start new negotiations until its concerns on the existing agreement are addressed.

Right now, Indonesia is negotiating trade deals with Australia, Chile, EFTA (European Free Trade Area), the European Union, Korea, India and Ukraine. It has also expressed an interest to join the Transpacific Partnership (TPP) and to establish a free trade zone with the Eurasian Economic Union. Since 2012, Jakarta is part of the controversial Regional Comprehensive Economic Partnership (RCEP) talks with the nine other ASEAN (Association of South-East Asian Nations) governments and their six FTA partners: Australia, China, India, Japan, New Zealand and South Korea.

As member of ASEAN, Indonesia is also party to the group’s FTAs with Australia and New Zealand, China, India, Japan and Korea, as well as the ASEAN Economic Community.

Following a growing discontent against the investor-state dispute settlement (ISDS) mechanism, whereby foreign investors can seek compensation in an arbitration tribunal if new laws or regulations negatively affect their investment potential, Indonesia decided in 2014 to phase out 67 of its bilateral investment treaties. The government has terminated 20 treaties so far and has been developing a new model BIT that would supposedly reflect a more balanced approach between the country’s right to regulate and foreign investor protection.

last update: October 2016


New Indonesian envoy to US vows to secure GSP extension, trade deal
Indonesia’s newly appointed envoy to the US has vowed to double down on the government’s economic diplomacy push to ensure the country retains its trade perks and commences negotiations of a limited trade deal with Washington.
The red carpet investments in the middle of a pandemic result in crisis of people’s sovereignty
Indonesian CSOs assesses the national economic recovery strategy by strengthening policies economic liberalization focusing only on investment and exports will only be increasingly open space for corporate monopoly on economic resources.
Indonesia, Australia to roll out worker exchange program
Indonesia will conduct a worker-exchange program with Australia to boost its human resources. The plan was announced by a senior government official just days after the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) entered into force.
Indonesia to resume trade negotiations with Pakistan on FTA: ambassador
The Government of Indonesia will soon resume trade negotiation with Pakistan on free trade agreement (FTA), which were suspended due to COVID-19.
Swiss ‘Stop Palm Oil’ plea ready for referendum consideration
Activists in Switzerland are calling for a ‘Stop Palm Oil’ referendum opposing the Swiss free trade agreement (FTA) with Indonesia. They submitted thousands of signed petitions to the Federal Chancellery in Bern on Monday.
Indonesian FTA kicks in on July 5
Australia’s free trade agreement with Indonesia as its biggest neighbour will finally kick into gear on July 5.
COVID-19 risks stalling the Indonesia-Australia Economic Partnership
It’s been a year since the signing of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA); the global pandemic could delay the next critical steps.
Will IA-CEPA be the boost to Australia-Indonesia relations leaders are banking on?
The economic importance of IA-CEPA remains to be seen, at least from Indonesia’s side. IA-CEPA would require many changes in Indonesian regulations at the ministerial and local levels, which has been very challenging in the past.
Economic diplomacy: Indonesian trade deals and real deals
Bilateral trade deal sceptics have criticised the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) as more of a strategic public relations document than genuine economic reform.
Indonesia-Australia partnership
The IA-CEPA has been ratified by the legislatures of both countries and is thus strongly based on a national political consensus, allowing for immediate implementation..