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Govt flaunts critical minerals in trade talks with US
As a top-tier government delegation kicks off trade talks in Washington, Jakarta is counting on critical minerals to help secure access to the United States market for Indonesian goods, but the highly protectionist administration led by President Donald Trump is looking to reduce import dependence in that area too.
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Bargaining chip: Piles of coal are seen on barges on Aug. 16, 2022, in Samarinda, East Kalimantan. (AFP/Adek Berry)
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s a top-tier government delegation kicks off trade talks in Washington, Jakarta is counting on critical minerals to help secure access to the United States market for Indonesian goods, but the US is looking to reduce import dependence in that area too.
Leading the delegation, Coordinating Economic Minister Airlangga Hartarto said both sides had agreed that the negotiations, set to complete within 60 days, would include investment and trade partnerships, critical minerals and the development of a reliable supply chain corridor, according to press release issued by his office on Saturday.
Under the previous US administration of Joe Biden, Indonesia had sought, but failed, to secure a limited free trade agreement (FTA) on critical minerals with the US in the context of the US-led Indo-Pacific Economic Framework (IPEF), but the cards have been reshuffled under the highly protectionist administration led by US President Donald Trump.
Haryo Limanseto, a spokesperson for the Office of the Coordinating Economic Minister, told The Jakarta Post on April 15 that all cooperation efforts were still in progress but noted that everything was being consolidated under a single priority to align with the ongoing talks to stave off a 32 percent US import tariff on most Indonesian products.
Without a bipartisan or long-term commitment from the US, frameworks like IPEF may be of little help, Andry Satrio Nugroho, an economist at the Institute for Development of Economics and Finance (INDEF), told the Post on April 14.
“If we rely solely on the IPEF framework, we need to consider that it’s a Biden-led initiative. There [was always going to be] a strong chance that Trump abandons it if he returns to office,” he said, since “he has historically shown little support for multilateral agreements like this.”
Trump announced “reciprocal” import taxes on April 2 to reshore manufacturing and address what the administration sees as unfair trade relationships. The executive order directly flagged exemptions such as copper and gold but lists the vast majority of exemptions in an accompanying annex.
