In these days and weeks, the informal leader of ASEAN is striving to finalise a trade agreement with the United States. Why is this merely a formality, and what problems have already been created for the Indonesian economy?

Unequal Relations

A 19% tariff on Indonesian goods—this is the unsightly face of the American-Indonesian “Comprehensive Strategic Partnership” revealed by the Washington-Jakarta agreements. Although, in general, “agreements” is too polite a term for that. The situation resembled more the racketeering style of 1990s criminals. The military and economic power of the US and Indonesia cannot be juxtaposed, and D. Trump turned the pressure on his partner up to the maximum. The tactic that was used initially (having now become classic) is the following: to propose an astronomical tariff figure (in Indonesia’s case, it was 32%), forcing the partner to make concessions in order to graciously lower the barrier, but not by a large margin, and to cement the state of affairs. It goes without saying that such a dialogue between “strategic partners” looks more like “beating up a baby” and a manual on how to twist an independent country around one’s little finger without much effort?

The negotiations have resulted in the following: Indonesia increases imports from the US across all product groups, from soybeans to airliners; the pinnacle of racketeering mastery is that while remaining an oil and gas exporting country, Indonesia is forced to increase purchases of both oil and gas from the US. The “problem” of a trade balance, irking for D.Trump, due to being previously in Indonesia’s favour, is now being solved. Indonesian partners accept American standards and certification, uninterruptedly supply the US with “critical minerals,” and open up the economy to American........

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