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Jakarta Post

The power of options

The “other options” card is crucial to strengthen our hand in future negotiations.

Editorial board (The Jakarta Post)
Jakarta
Fri, January 24, 2025

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The power of options United States President Donald Trump (center) gestures alongside US First Lady Melania Trump and US Vice President JD Vance during the inaugural parade inside Capital One Arena in Washington, DC, on Jan. 20, 2025. (AFP/Angela Weiss)
Versi Bahasa Indonesia

Where does America First leave the rest of the world, including Indonesia?

With Donald Trump’s return to the White House earlier this week, that question is occupying the minds of policymakers around the world, especially in countries that have tied themselves very closely to the United States, whether politically, economically or both.

Hence, the power shift in Washington, DC, will particularly vex leaders in Brussels and London, while highlighting the advantages of independence and nonalignment in security and trade policies.

The obvious response to America First, a term used in US politics for more than a century, is for countries to signal that they have other options aside from close engagement with the US. If, indeed, they do have other options.

Indonesia does, thanks to its longstanding free and active foreign policy, which shines in times like these. The doctrine enjoys wide public support inside the country and commands respect in other capitals.

Indonesia flashed its other options by joining the BRICS group of emerging countries just days before Trump assumed office for his second term as president.

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In the past, America First usually referred to an isolationist, or at least a less interventionist, foreign and security policy. For Trump, that might be one element, but the focus appears chiefly economic.

A memorandum titled “America First Trade Policy” published on the White House’s website the day Trump was inaugurated declares in the very first paragraph the goal of “eliminating destructive trade deficits” and further down mentions “supplemental tariff or other policies” as a way “to remedy such deficits”.

One country with which the US has a large trade deficit is Indonesia. In fact, our surplus hit a record high just last year. We export more than twice as much to the US as we import from them, which gives US diplomats rhetorical ammo for bilateral talks.

Yet Coordinating Economic Minister Airlangga Hartarto told reporters in Jakarta on Jan. 13 that Jakarta would strive for an agreement with the US to lower tariffs and that a free trade agreement (FTA) was among the options of what it might seek to secure with Trump.

Kudos for putting on a brave face, but such a deal remained elusive under the Biden administration, and it is doubtful Trump’s team will be any more receptive.

Long-term concessions for US big oil or mining firms might go some way in setting the stage for an agreement, but that could require regulatory changes first.

Which is why the “other options” card is crucial to strengthen our hand in future negotiations.

The BRICS forum is often portrayed as a counterweight to the Group of Seven (G7) in shaping the global conversation on trade, and some say it has a broader purpose of challenging Western dominance in international affairs.

Critics argue that joining BRICS yields few tangible benefits while exposing us to claims of trying to change the Western-led world order.

None of those critics would attack G7 members for trying to maintain that same Western-led world order, which in many cases hampers emerging economies’ development through concepts like friendshoring or homeshoring.

Joining BRICS is not so much about direct benefits, even though the Indonesian Chamber of Commerce and Industry (Kadin) sees opportunities for these, but rather about joining hands with other emerging economies to defend open markets and keep global supply chains free from geopolitical gamesmanship.

Unimpeded international trade and investment is crucial for developing economies like Indonesia to catch up, and closer engagement with other countries from the so-called Global South makes us less vulnerable to the political whims of the so-called Global North.

At a time when the World Trade Organization is largely ineffective, Indonesia will also need to pursue closer trade ties with other countries in the region, while building on the frameworks of ASEAN and the Regional Comprehensive Economic Partnership (RCEP) to ensure social and environmental standards and prevent any race to the bottom.

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