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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


Indonesia to resume free-trade talks
Indonesia will resume free trade and economic partnership negotiations with important trading partners as President Joko "Jokowi" Widodo’s administration steps up efforts to boost exports amid the country’s economic slowdown.
Update on Indonesia BITs review
Indonesia for Global Justice together with Indonesian civil society networks met with the Director of Bilateral Cooperation of Investment Coordinating Board, Fritz Horas Silalahi, in Jakarta to discuss the review of Indonesia Bilateral Investment Treaties (BITS).
Indonesia mulls canceling trade pact with Japan after years of deficit
Indonesia is considering a halt to the Indonesia-Japan Economic Partnership Agreement, as the deal fails to boost the Southeast Asian country’s trade with Japan since it has posted a deficit for every year since 2008.
Indonesia fishermen to suffer more under Asean Economic Community
Indonesian fishermen will suffer more when the ASEAN Economic Community is implemented in 2015, the environmentalist organization Walhi said.
Indonesia 1, Newmont 0
US firm Newmont Mining has withdrawn its arbitration claim against Indonesia
Revamping bilateral treaties
Indonesia’s intention to end bilateral investment treaties (BIT) has been questioned again and again, most recently in an article published on July 1 in the Financial Times, writes Indonesia’s Ambassador to Belgium in a Jakarta Post opinion piece.
Indonesia should withdraw from the ICSID!
If there is dispute against the government, investors, be they foreign or local, they should bring their cases to the Indonesian judiciary or other available national dispute mechanisms.
After South Africa, Indonesia takes a brave decision to terminate its BIT with the Netherlands
Last week, the Indonesian government announced that it will terminate its Bilateral Investment Treaty (BIT) with the Netherlands, joining the growing number of countries concerned about the excessive corporate rights enshrined in investment agreements.
Boediono meets with Netherlands
Indonesian VP Boediono met with Dutch PM Mark Rutte on Sunday and explained that Indonesia’s decision not to extend its bilateral investment treaty with the Netherlands was common to all countries with bilateral investment agreements with Indonesia that would soon end.
Indonesia indicates intention to terminate all of its bilateral investment treaties?
According to the Netherlands Embassy in Jakarta, Indonesia has informed the Netherlands that it has decided to terminate the Bilateral Investment Treaty between the two nations from 1 July 2015. The Embassy also states that “the Indonesian Government has mentioned it intends to terminate all of its 67 bilateral investment treaties“.