Washington: The United States and the Republic of Indonesia have agreed on a framework for negotiating a Reciprocal Trade Agreement to boost bilateral economic connections, according to a joint statement issued by the White House on Tuesday.
The agreement seeks to grant both countries' exporters unrivaled access to each other's markets and builds on the United States-Indonesia Trade and Investment Framework Agreement signed on July 16, 1996.
According to a statement from the White House, Indonesia would remove around 99 percent of tariff restrictions on a wide range of U.S. industrial, food, and agricultural products shipped to the nation.
It also stated that the United States would decrease reciprocal tariffs on Indonesian originating items to 19 percent, as stated in Executive Order 14257 of April 2, 2025, and may identify certain products that are not naturally available or domestically produced in the United States for a further reduction in the reciprocal tariff rate.
The White House also stated that the two countries will explore facilitative rules of origin to ensure that the majority of the agreement's benefits go to the United States and Indonesia.
The accord will also tackle non-tariff barriers. According to the joint declaration, the United States and Indonesia will work together to address Indonesia's nontariff restrictions that affect bilateral commerce and investment in key sectors, including exempting US firms and commodities from local content regulations; accepting vehicles built to US federal motor vehicle safety and emissions standards; accepting FDA certificates and prior marketing authorizations for medical devices and medicines; removing certain labeling requirements; exempting US exports of cosmetics, medical devices, and other manufactured products from certain requirements; taking steps to resolve many longstanding intellectual property issues identified in USTR's Special 301 Report; and addressing US concerns with conformity assessment processes.
The White House also said that Indonesia would work to remove obstacles to U.S. exports, including the removal of import restrictions or licensing requirements for U.S. remanufactured commodities or their components; the termination of preshipment inspection or verification requirements for U.S. goods; and the adoption and implementation of good regulatory practices.
Regarding agricultural cooperation, the statement stated: The United States and Indonesia have also agreed to address and eliminate barriers to U.S. food and agricultural products in the Indonesian market, including exempting U.S. food and agricultural products from all import licensing regimes, including commodity balance requirements; ensuring openness and fairness with respect to geographical indications; granting permanent Fresh Food of Plant Origin (FFPO) designation for all relevant U.S. plant products; and recognizing U.S. regulatory oversight, including the listing of all U.S. meat, poultry, and dairy establishments and the acceptance of certifications issued by U.S. regulatory authorities.
The framework also incorporates digital trade, labor rights, and environmental cooperation. The White House stated that Indonesia has committed to remove obstacles that impede digital trade, services, and investment. Indonesia has committed to eliminating existing HTS tariff lines on "intangible products" and suspend relevant import declaration requirements; to supporting a permanent moratorium on customs duties on electronic transmissions at the WTO; and to taking meaningful measures to implement the Joint Initiative on Services Domestic Regulation.
Indonesia also commits to protecting internationally recognized labor rights, including prohibiting the importation of products created by forced or obligatory labor; amending its labor laws; and enhancing the enforcement of its labor laws, according to the statement.
It also stated that Indonesia is dedicated to implementing and sustaining strong levels of environmental protection, as well as properly enforcing its environmental legislation, including via efforts to improve forest sector governance and fight illegal, unreported, and unregulated fisheries and wildlife trafficking.
Indonesia will ease restrictions on the sale of industrial products, including vital minerals, to the United States, according to the White House.
The two countries have also pledged to improve economic and national security collaboration: The United States and Indonesia are committed to strengthening economic and national security cooperation to improve supply chain resilience and innovation through complementary steps to address unfair trade practices of other nations, as well as cooperation on export control, investment security, and duty avoidance.
Furthermore, the statement revealed future commercial arrangements, including the acquisition of aircraft now worth $3.2 billion; the purchase of agricultural products... with an estimated total value of $4.5 billion; and the purchase of energy products... worth $15 billion.
In the following weeks, the United States and Indonesia will negotiate and finalize the Agreement on Reciprocal Trade, prepare the Agreement for signature, and complete domestic procedures in advance of its implementation, according to the White House.
