Indonesia said it has resolved all substantive issues in trade talks with the US and is on course to sign an agreement in late January, removing a major source of uncertainty for Southeast Asia’s biggest economy.
Both countries have aligned on the “crucial issues” in their draft agreement, protecting the mutual interests of both parties, Coordinating Minister for Economic Affairs Airlangga Hartarto said in an online presentation on Tuesday, after meeting with US Trade Representative Jamieson Greer in Washington.
The trade agreement will be signed by both President Prabowo Subianto and President Donald Trump, with the Indonesian leader expected to travel to the US at the end of January.
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The US agreed to exempt tariffs on certain Indonesian products including palm oil, coffee and tea, said Airlangga, Indonesia’s lead negotiator. The US will also gain access to Indonesia’s critical minerals, he said.
Under a framework announced in July, Indonesia was to eliminate tariffs on more than 99 per cent of US goods and remove non-tariff barriers, in exchange for the US reducing tariffs on Indonesian products from a threatened 32 per cent to 19 per cent. Indonesia also agreed to purchase roughly US$19 billion in American products, including 50 Boeing jets and agricultural goods.
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Since then, negotiations hit sticking points over US demands that could limit Indonesia’s autonomy in engaging in strategic trade and investment agreements with other countries. Of particular concern was the potential effect on the critical mineral and energy sector and commerce with China and Russia.