In a statement received in Jakarta on Monday, Deputy Chair of Commission IV Chusnunia Chalim said the Agreement on Reciprocal Trade (ART), signed by President Prabowo in Washington, D.C., on Feb. 19, covers trade, investment, digital policy, natural resources, labor, the environment and economic security.
She said the pact appeared to disadvantage Indonesia, citing a clause requiring Jakarta to consult and obtain US approval before entering cooperation with other countries.
“There are more than 20 articles in the agreement that are concerning, for example regarding the Domestic Component Level (TKDN). The clause states that goods from the US are exempt from requirements set in Indonesia,” she said.
If implemented, she warned, other countries could demand similar treatment, potentially weakening Indonesia’s push for industrialization through local content rules.
Chalim noted that TKDN is regulated under Industry Minister Regulation No. 35 of 2025, which mandates high local component levels — including for nickel batteries and electronic modules — to qualify for incentives.
The regulation requires manufacturers building facilities in Indonesia and employing local workers to meet a minimum 25 percent TKDN threshold to receive official recognition.
Under the ART, she said, Indonesia risks reverting to a market and import destination rather than developing as a self-sufficient industrial production base.
She also criticized provisions on reducing non-tariff barriers and certification, warning they could trigger a surge of imported agricultural and livestock products such as beef, milk and cheese, putting pressure on local farmers.
Chalim added that the US Supreme Court had invalidated reciprocal tariffs, ruling that tariff-setting authority rests with Congress rather than the president.
She urged the government to ensure international agreements uphold social interests, equality and mutual benefit.
“The government and the House still have time to consider renegotiating if the previous trade agreement was based on the threat of high tariffs, which have now been canceled,” she said, adding that legal developments in the United States create room for reassessment.
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Translator: Imam Budilaksono/Muhammad Rizki, Cindy Frishanti O
Editor: Rahmad Nasution
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