US, Indonesia agree to framework for negotiating reciprocal trade deal

The agreement will be finalised in the coming weeks.

The United States will reduce to 19 per cent its reciprocal tariffs on goods from Indonesia, and may also identify certain commodities that are not naturally available or domestically produced in the United States for a further reduction in the reciprocal tariff rate.

The Agreement on Reciprocal Trade will provide exporters on both sides unprecedented access to each other’s markets, a joint statement released by the White House said.

The agreement will build upon their long-standing economic relationship, including the US-Indonesia Trade and Investment Framework Agreement, signed on July 16, 1996.

Both sides will negotiate facilitative rules of origin that ensure that the benefits of the agreement accrue primarily to these two countries, the statement said.

They will work together to address Indonesia’s non-tariff barriers that affect bilateral trade and investment in priority areas, including exempting US companies and originating goods from local content requirements; removing certain labeling requirements; and taking steps to resolve many long-standing intellectual property issues.

Indonesia will work to address barriers for US exports, including through the removal of import restrictions or licensing requirements on US remanufactured goods or their parts; the elimination of pre-shipment inspection or verification requirements on imports of US goods; and the adoption and implementation of good regulatory practices.

Indonesia has also committed to address barriers impacting digital trade, services and investment.  Indonesia will provide certainty regarding the ability to transfer personal data out of its territory to the United States. 

Indonesia will adopt and implement a prohibition on the import of goods produced by forced or compulsory labour; amend its labour laws to ensure that workers’ rights to freedom of association and collective bargaining are fully protected; and strengthen enforcement of its labour laws.

It has also committed to adopt and maintain high levels of environmental protection and to effectively enforce its environmental laws.

ALCHEMPro News Desk (DS)