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Indonesia

Indonesia signed a major comprehensive FTA with Japan in 2007. In February 2012, it signed a preferential trade agreement with Pakistan which the two governments intend to turn into an FTA. But the Pakistan government has reportedly refused to start new negotiations until its concerns on the existing agreement are addressed.

Right now, Indonesia is negotiating trade deals with Australia, Chile, EFTA (European Free Trade Area), the European Union, Korea, India and Ukraine. It has also expressed an interest to join the Transpacific Partnership (TPP) and to establish a free trade zone with the Eurasian Economic Union. Since 2012, Jakarta is part of the controversial Regional Comprehensive Economic Partnership (RCEP) talks with the nine other ASEAN (Association of South-East Asian Nations) governments and their six FTA partners: Australia, China, India, Japan, New Zealand and South Korea.

As member of ASEAN, Indonesia is also party to the group’s FTAs with Australia and New Zealand, China, India, Japan and Korea, as well as the ASEAN Economic Community.

Following a growing discontent against the investor-state dispute settlement (ISDS) mechanism, whereby foreign investors can seek compensation in an arbitration tribunal if new laws or regulations negatively affect their investment potential, Indonesia decided in 2014 to phase out 67 of its bilateral investment treaties. The government has terminated 20 treaties so far and has been developing a new model BIT that would supposedly reflect a more balanced approach between the country’s right to regulate and foreign investor protection.

last update: October 2016


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Activists in Switzerland are calling for a ‘Stop Palm Oil’ referendum opposing the Swiss free trade agreement (FTA) with Indonesia. They submitted thousands of signed petitions to the Federal Chancellery in Bern on Monday.
Indonesian FTA kicks in on July 5
Australia’s free trade agreement with Indonesia as its biggest neighbour will finally kick into gear on July 5.
COVID-19 risks stalling the Indonesia-Australia Economic Partnership
It’s been a year since the signing of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA); the global pandemic could delay the next critical steps.
Will IA-CEPA be the boost to Australia-Indonesia relations leaders are banking on?
The economic importance of IA-CEPA remains to be seen, at least from Indonesia’s side. IA-CEPA would require many changes in Indonesian regulations at the ministerial and local levels, which has been very challenging in the past.
Economic diplomacy: Indonesian trade deals and real deals
Bilateral trade deal sceptics have criticised the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) as more of a strategic public relations document than genuine economic reform.
Indonesia-Australia partnership
The IA-CEPA has been ratified by the legislatures of both countries and is thus strongly based on a national political consensus, allowing for immediate implementation..
Indonesia ratifies Australia trade deal
The Indonesian parliament has given the green light to a new trade deal with Australia, paving the way for the agreement to be signed in Canberra on Monday.
Indonesia likely to see small gains from US-China deal
Indonesia is likely to see a small benefit from the phase-one trade deal between the United States and China as the demand for commodities and the overall Chinese economy are expected to improve.
’When two elephants fight’: EU, Indonesia tussle over resources
As disputes over palm oil and nickel head to World Trade Organization, affected residents say they feel trapped.
Indonesia warns on EU trade deal, dairy imports amid palm oil spat
Indonesia is prepared to walk away from talks on a free trade deal with the European Union over the bloc’s stance on palm oil, while also launching a probe into subsidies on dairy imports from the EU.