JAKARTA, Dec 23 — Indonesia and the United States (US) have agreed on all substantial issues for a tariff deal, paving the way for the signing of an agreement by presidents Prabowo Subianto and Donald Trump at the end of January.
Indonesia's chief negotiator and Senior Economic Minister Airlangga Hartarto, speaking from Washington late on Monday after meeting US Trade Representative Jamieson Greer, said the US wanted access to Indonesia's critical minerals and had agreed to grant tariff exemptions for its palm oil, tea, and coffee.
Indonesia is the world's biggest producer and exporter of palm oil and a major global supplier of robusta coffee beans.
Talks between the two countries had appeared at risk of collapse earlier this month after the US accused Indonesia of backtracking on prior commitments, although Jakarta said their "dynamics" were normal and it was just a matter of "harmonising the language".
Airlangga reiterated that there were "dynamics" during the talks, but that all substantial issues had been resolved and that the latest round of negotiations went well.
"The main thing, of course, is providing balanced market access for American products, and at the same time, market access for Indonesia to the US," he said in a video briefing with the Indonesian media.
Officials from both countries are now seeking to set up a meeting between Prabowo and Trump by the end of January, where a trade agreement could be signed.
Airlangga added that no provision in the agreement would limit Indonesia's ability to enter into trade deals with other countries.
"No Indonesian policies are restricted by this agreement. This agreement is commercial and strategic in nature, and benefits the economic interests of both countries in a balanced manner," he said.
A provision in a US-Malaysia tariff deal allows Washington to end the pact and restore the tariff Trump announced in April, if new deals endanger key US interests and talks fail to resolve its concerns.
Cambodia also has a similar clause in its US deal, agreed in October, with some differences in the wording.
Trump imposed a 19 per cent tariff on Indonesia after a preliminary agreement in July, down from the 32 per cent he had threatened to impose in April, in return for Indonesia's promises to remove tariff and non-tariff barriers facing American exports, as well as to buy more American goods to close the trade gap.
Airlangga noted that there was no risk of the US raising the tariff back to 32 per cent if the January signing does not materialise, as everything in the draft agreement had been agreed by both sides.
"There is no factor that can hinder the signing of this ART (Agreement on Reciprocal Trade)," he said.
Official data from Jakarta showed that from January to October, two-way trade between the two countries was US$36.2 billion (RM147.2 billion), with Indonesia posting a US$14.9 billion (RM60.61 billion) surplus. The US is Indonesia's second biggest export market.
