Indonesia has strengthened its international trade position through active and measured economic diplomacy, resulting in tariff exemptions from the United States and expanded access to the Eurasian market (26/12).

The government aims to protect national interests, expand export markets, and improve the competitiveness of Indonesian products amid global economic dynamics.

Coordinating Minister for Economic Affairs Airlangga Hartarto said trade cooperation with the United States has shown significant progress during a media briefing in Jakarta on Friday.

Indonesia–US Trade Talks Cover Tariffs and Critical Minerals

According to Airlangga, discussions with the United States covered all sectors, including access to critical minerals. He said discussions have taken place with US export agencies and American companies that are already engaging with Indonesian critical mineral firms.

“Regarding discussions with the United States, all sectors were discussed, including access to critical minerals. Of course, for critical minerals there have already been discussions with the US export agency and also American companies that have spoken with critical mineral companies in Indonesia. So that is access to critical minerals provided by the Government,” Airlangga said.

The Government of Indonesia and the United States Trade Representative (USTR) have agreed on all main and technical elements of the Agreements on Reciprocal Trade (ART) during meetings in Washington D.C. The agreement follows the principle of balanced interests between both countries.

US Grants Tariff Exemptions for Key Indonesian Exports

Under the agreement, the United States has granted tariff exemptions for several leading Indonesian commodities. These include crude palm oil (CPO), coffee, tea, cocoa, and various labor-intensive manufactured products.

The tariff exemptions are expected to maintain the competitiveness of Indonesian products in the US market and provide certainty for domestic business players.

In addition to tariff issues, cooperation also includes cross-sector discussions, including critical minerals. Airlangga noted that collaboration in this sector is not new, citing long-standing US company involvement in Indonesia’s mining industry, including Freeport’s investment since 1967 and the presence of other multinational companies.

The ART document has now entered the legal scrubbing and finalization stage. The government is targeting the signing of the agreement by the Presidents of Indonesia and the United States before the end of January 2026.

Indonesia Opens Eurasian Market Through Free Trade Agreement

At the same time, Indonesia is expanding export market diversification by strengthening trade relations with non-traditional partners. One key step was the signing of the Indonesia–Eurasian Economic Union Free Trade Agreement (I-EAEU FTA) on 21 December 2025.

The agreement opens access to the Eurasian region, which includes Russia, Kazakhstan, Kyrgyzstan, Belarus, and Armenia. The region has a combined population of nearly 180 million people and a total GDP of USD2.56 trillion. More than 95% of trade value under the agreement receives tariff preferences, with average import duties close to zero percent.

Export Opportunities and Support for Businesses

Through the I-EAEU FTA, Indonesia can increase exports of key products such as CPO and its derivatives, footwear, coffee, cocoa, textiles, fisheries products, as well as digital-based services and the creative economy. The agreement is projected to support national economic growth by 2.36% and strengthen the competitiveness of value-added products.

To accelerate the use of trade agreements, the government is encouraging the formation of business councils and the organization of business forums with partner countries, including Eurasia and the European Union. These efforts aim to support direct communication between businesses and speed up trade cooperation without waiting for full ratification.

The government reaffirmed its commitment to maintaining domestic economic resilience while opening wider access to global markets. Expanded trade agreements are expected to improve export performance, create opportunities for businesses including MSMEs, and support sustainable economic resilience.

“So, the Government maintains domestic purchasing power, then opens markets, while also safeguarding domestic economic resilience. On the other hand, we open new external markets, including the I-EAEU. So, for Indonesian entrepreneurs, they can fill overseas markets where average import duties are already close to zero. This opens opportunities for Indonesia, including MSMEs, to access global markets more competitively,” Airlangga said.

PHOTO: COORDINATING MINISTRY FOR ECONOMIC AFFAIRS

This article was created with AI assistance.