Indonesia and U.S. Sign Reciprocal Trade Agreement After Months of Talks

Indonesia and the United States have signed a reciprocal trade agreement following protracted negotiations, Indonesian officials said. The accord was signed by Indonesia's senior economic minister and the U.S. Trade Representative after Washington agreed last year to reduce Indonesia's exports to the U.S. to 19% from an earlier 32% figure. President Prabowo Subianto traveled to Washington for the signing and to attend a leaders' meeting, during which he and President Donald Trump signed an implementation document described by the White House as supporting economic security and growth. Earlier in the week, Indonesian and U.S. companies concluded deals valued at $38.4 billion.

Key Points

Indonesia and the U.S. have signed a reciprocal trade agreement after months of negotiations, according to Indonesia's Ministry of Economic Affairs.
Washington previously agreed to reduce Indonesia's exports to the U.S. to 19% from an initial 32%, a change referenced in the ministry's announcement.
President Prabowo visited Washington for the agreement and the first leaders' meeting of President Trump's Board of Peace; the two presidents signed an implementation document framed by the White House as promoting economic security and growth. Indonesian and U.S. companies also signed deals worth $38.4 billion earlier in the week.

JAKARTA, Feb 20 - Indonesia and the United States have formalized a reciprocal trade agreement, the Indonesian Ministry of Economic Affairs said on Friday. The ministry said the signing followed several months of negotiations and was carried out by Indonesia's senior economic minister, Airlangga Hartarto, and U.S. Trade Representative Jamieson Greer.

The ministry's announcement noted that Washington had agreed last year to lower Indonesia's exports to the U.S. to 19%, down from an initial rate of 32%. The ministry's statement did not provide further details of the newly signed agreement.

Indonesia's president, Prabowo Subianto, traveled to Washington in connection with the deal and to participate in the first leaders' meeting of U.S. President Donald Trump's Board of Peace. During the visit on Friday, President Prabowo and President Trump signed a document titled 'Implementation of the Agreement Toward a NEW GOLDEN AGE for the U.S.-Indonesian Alliance.'

The White House described that signed document as one that "will help both countries to strengthen economic security, promote economic growth, and thereby continuously lead to global prosperity." The administration framed the implementation text as supporting broader economic and security objectives between the two governments.

The Indonesian government also noted commercial momentum earlier in the week, when Indonesian and U.S. companies reportedly signed deals totaling $38.4 billion. Those commercial agreements were cited in the context of the visit and the broader push to deepen economic ties.

Context and next steps

The ministry's public statement did not include the granular provisions of the reciprocal trade pact or the timeline for implementation. With several months of negotiations concluded in a formal signing, the absence of detailed text in the announcement leaves open questions about specific sectoral commitments and regulatory changes that may follow.

Officials from both countries will presumably need to provide further public detail if the agreement is to be fully assessed by market participants and affected industries. For now, the available information centers on the signatures, the prior adjustment of Indonesia's export percentage to the U.S., the high-level implementation document, and the sizable private-sector deals reported earlier in the week.

Risks

Lack of published details - The ministry's statement did not include specifics of the agreement, creating near-term uncertainty for businesses and markets that may be affected by the pact. Affected sectors could include trade-exposed manufacturing, exporters, and supply-chain linked industries.
Implementation ambiguity - With a high-level implementation document signed by the two presidents but no public breakdown of measures, there is uncertainty about the timing and scope of regulatory or tariff changes, which could affect investment planning in industries tied to bilateral trade.

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