JAKARTA: The government currently sees no need to send another delegation to the United States for the negotiations on tariffs as it believes it has made its case for open bilateral trade and says the ball is now in the US’ court.
Coordinating Economic Minister Airlangga Hartarto (pic), who helmed an Indonesian delegation dispatched to Washington, DC, in April, said in a press conference on Friday (June 13) that the documents submitted to his US counterparts were “already relatively comprehensive” and that what was left was “the [US] decision.”
Asked whether Jakarta’s negotiators would visit the US for a second round of top-level talks as US import tariffs loom over Indonesian exports, the minister replied: “So far, no, because it’s already deemed complete.”
That contrasts with statements from June 6, when Airlangga said the team would depart to the US around this week. The decision not to send another trade mission comes after President Prabowo Subianto received a 15-minute phone call from US President Donald Trump on Thursday night, in which the two leaders reaffirmed their commitment to global stability, according to Jakarta.
The topic of the phone call included the two presidents seeing eye to eye on “increasing bilateral cooperation between Indonesia and the US”, said Cabinet Secretary Teddy Indra Wijaya in a press statement on Friday.
The US Embassy in Jakarta declined to respond when asked about Jakarta’s decision not to send a delegation, while the Office of the US Trade Representative, which spearheads Washington’s side in the tariff negotiations, was not immediately available for comment.
Monday marked the 56th day since Airlangga said on April 18 that both sides had agreed to conclude the negotiations within 60 days, before a grace period expires that the US granted Jakarta to try and stave off a 32 per cent import tariff on Indonesian goods shipped to the US.
Trump announced the suspension on April 9, mere hours after the policy became effective, making July 9 the deadline by which dozens of countries need to conclude negotiations with Washington, or risk steep tariffs.
Edi Prio Pambudi, an undersecretary for coordinating economic cooperation and investment at Airlangga’s office, told The Jakarta Post last week that Indonesia was “awaiting America’s response”.
Edi said the two sides had engaged in dialogue to follow up on the initial Indonesian trade delegation but admitted the previously agreed 60-day target to wrap up those talks was uncertain, noting: “Who can guess what President Trump might do? Let’s wait; the US is the one to decide the time limit. The ball is in their court.”
The United Kingdom is the only country to have secured a tariff deal with the US so far, which was signed just a month after Trump had issued the reciprocal tariffs. Others are playing hard to get, like the European Union, which said on Monday that the trade talks with Washington were now focussing on the details but there was no guarantee of a deal.
Japan also appears to be holding out, with Prime Minister Shigeru Ishiba last week stating: “We won’t compromise Japan’s interests by prioritising a quick deal”, according to Bloomberg.
Bank Permata chief economist Josua Pardede told the Post on Monday that Indonesia did not have the privilege to adopt a similar stance, as doing so risked creating new uncertainties.
“At present, Indonesia is not in a particularly strong position, as it is already contending with a weakening domestic economy. Therefore, policy decisions that enhance certainty are essential in mitigating the adverse effects of global uncertainty,” said Josua.
While the US itself was facing economic challenges from the tariff policy, such as inflationary pressure and market backlash, “Indonesia's current position is equally, if not more, vulnerable,” since the archipelago is grappling with current account and fiscal deficits, said Josua.
Washington has pointed to its trade deficit as justification for double-digit levies placed on goods from dozens of countries in what it calls “reciprocal” measures. The main concessions Jakarta had offered consist of importing more US-made products, exclusive tariff cuts and deregulation to benefit US companies.
Indonesia has also presented a prospective US$2 billion investment in a blue ammonia project in the US state of Louisiana as a concession, even though that investment would come from Indorama, a private company rooted in Indonesia.
Economist Intelligence Unit analyst Wen Chong Cheah told the Post on Wednesday that the concessions Jakarta offered were “very generous” but had yielded “insignificant progress” in the negotiations.
“The delay suggests Indonesia is not a current priority. [...] The negotiation with Indonesia may be perceived as less urgent from the US perspective, especially if the US is focused on larger geopolitical or trade wins,” said Cheah. - The Jakarta Post/ANN
