Indonesia to Pursue Fairer International Trade

Jakarta. Southeast Asia’s largest economy Indonesia has included a “fairer international trade” as part of its foreign policy agenda, its top diplomat revealed Friday.

Foreign Affairs Minister Sugiono delivered Friday his first-ever annual press statement that laid out Indonesia’s foreign diplomacy under President Prabowo Subianto. This includes what sort of economic diplomacy would the archipelagic nation pursue in the coming years. Prabowo aspires to record 8-percent economic growth within his term. As the target tops Indonesia’s 5-percent natural growth rate, Indonesia intends to engage in a more equitable trade relationship with its partners.

“Indonesia’s economic diplomacy will push for a fairer trade,” Sugiono said in Jakarta.

He added: “We seek to expand market access for our products, including [access to] non-traditional markets. Our economic diplomacy includes attracting investments that support the government’s programs.”

The Central Statistics Agency (BPS) data shows China is the largest contributor to Indonesia’s trade deficit. Indonesia suffered a $9.6 billion deficit when trading with China in January-October 2024. Followed by Australia ($3.9 billion) and Thailand ($3.4 billion). However, Indonesia managed to book a surplus in overall trade for 54 consecutive months since May 2020.

At present, Indonesia is trying to secure some trade pacts that could grant the country’s businesses greater access particularly to countries. Sugiono said “these agreements could provide better protection for Indonesian businesses, including the small enterprises”. These deals are also expected to “reduce trade tension”.

Some negotiations that are set for completion this year include the much-awaited Indonesia-European Union Comprehensive Economic Partnership Agreement (CEPA). Despite having launched the negotiations in 2016, both Indonesia and the European Union (EU) have been struggling to snag the deal that could significantly reduce tariffs. Jakarta recently pushed the Indonesia-EU CEPA deadline to no later than the first half of 2025. Amidst the years-long negotiations, Indonesia-EU ties have faced some challenges. 

For instance, the European bloc has launched an anti-deforestation policy that could make it harder for Indonesia to export its top commodity palm oil to the EU. Sugiono’s annual statement, too, alluded to the EU’s anti-deforestation rule or the EUDR.

“In our economic diplomacy, we cannot sit still. But we should respond to the practices and any economic policies that are unfair, including [those unfair] towards Indonesia’s key commodities. To this end, we will pursue a more inclusive and fair global economic architecture that makes sure the voices of the developing nations are heard,” Sugiono said.

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