Title
AGREEMENT BETWEEN THE UNITED STATES OF AMERICA AND THE REPUBLIC OF INDONESIA ON RECIPROCAL TRADE
Preamble
Preamble
The Government of the United States of America ("United States") and the Government of the Republic of Indonesia ("Indonesia") (hereinafter referred to individually as a "Party" and collectively as the "Parties"),
EMPHASIZING their shared values of commitment to sovereignty, economic prosperity, and resilient supply chains;
RECOGNIZING the cooperation between them, in particular in their trade and investment relations, as reflected in the Memorandum of Understanding Between the Government of the United States of America and the Government of the Republic of Indonesia Concerning the Establishment of the Council on Trade and Investment, done at Christchurch on July 16, 1996;
INTENDING to enhance reciprocity and mutual benefit in their bilateral trade and investment relationship by addressing tariff and non-tariff barriers; and
SEEKING to promote economic growth and strengthen their economic partnership through increased alignment on national and regional economic security matters,
HAVE AGREED as follows:
Body
Section 1. Tariffs and Quotas
Article 1.1. Tariffs
1. Indonesia shall apply a rate of customs duty (1) on originating goods of the United States as set out in Schedule 1 to Annex I.
2. The United States shall apply a revised reciprocal tariff rate on originating goods of Indonesia as set out in Schedule 2 to Annex I.
Article 1.2. Quantitative Restrictions
Indonesia shall not impose or maintain quantitative restrictions, including through the application of import licenses, a commodity balance program, or similar measures, on imports of originating goods of the United States, except in accordance with the GATT 1994.
Section 2. Non-Tariff Barriers and Related Matters
Article 2.1. Import Licensing
Indonesia shall not apply import licensing (2) to U.S. goods in a manner that restricts the importation of such goods. Indonesia shall ensure that any non-automatic import licensing that it applies is applied only to administer an underlying measure, and in a manner that is transparent, non-discriminatory, not unduly burdensome, and that does not reduce the competitiveness of U.S. exports.
Article 2.2. Technical Regulations, Standards, and Conformity Assessment
1. The Parties recognize their existing rights and obligations with respect to each other under the World Trade Organization (WTO) Agreement on Technical Barriers to Trade (TBT Agreement). Indonesia shall allow U.S. goods that comply with applicable U.S. or international standards, U.S. technical regulations, or U.S. or international conformity assessment procedures to enter its territory without additional conformity assessment requirements. In doing so:
(a) Indonesia shall accord to the conformity assessment bodies of the United States treatment no less favorable than that it accords to its own bodies; and
(b) Indonesia shall facilitate the acceptance of U.S. compliance procedures for goods that are not subject to third-party conformity assessment in the U.S. regulatory framework.
2. Indonesia shall ensure that technical regulations, standards, and conformity assessment procedures are applied in a non-discriminatory manner and do not operate as disguised restrictions on bilateral trade, and shall remove existing technical barriers to trade in areas that undermine reciprocity, including requirements for duplicative or unnecessary testing or conformity assessment.
Article 2.3. Agriculture
Indonesia shall provide non-discriminatory or preferential market access for U.S. agricultural goods as set forth in this Agreement.
(a) Indonesia shall ensure that its sanitary and phytosanitary (SPS) measures are science- and risk-based and do not operate as disguised restrictions on bilateral trade, and shall remove unjustified SPS barriers in areas that undermine reciprocity.
(b) Indonesia shall not adopt or maintain non-scientific, discriminatory, or preferential measures that are incompatible with U.S. or international standards or otherwise disadvantage U.S. exports to Indonesia, including as a result of entering into agreements or understandings with third countries.
Article 2.4. Geographical Indications
Indonesia shall ensure transparency and fairness with respect to the protection or recognition of geographical indications, including pursuant to an international agreement. In cases where Indonesia protects or recognizes a term that identifies a good as a geographical indication but where there is no given quality, reputation, or other characteristic of the good that is essentially attributable to its geographical origin, Indonesia shall permit use of the term in connection with U.S. goods.
Article 2.5. Cheese and Meat Terms
Indonesia shall not restrict U.S. market access due to the mere use of the individual cheese and meat terms listed in Annex II.
Article 2.6. Intellectual Property
Indonesia shall provide a robust standard of protection for intellectual property. (3) Indonesia shall ratify or accede to, and shall fully implement, the international intellectual property treaties in Annex III. Indonesia shall provide effective systems for civil, criminal, and border enforcement of intellectual property rights and shall ensure that such systems combat and deter the infringement or misappropriation of intellectual property, including in the online environment. Indonesia shall prioritize and shall take effective criminal and border enforcement actions against copyright and trademark infringements.
Article 2.7. Services
Indonesia shall address existing services trade barriers that undermine reciprocity. Indonesia shall refrain from imposing new barriers that provide less favorable treatment to U.S. services suppliers than the treatment afforded to domestic services suppliers and services suppliers from any third country, jurisdiction, or economy.
Article 2.8. Good Regulatory Practices
Indonesia shall adopt and implement good regulatory practices that ensure greater transparency, predictability, and participation throughout the regulatory lifecycle.
Article 2.9. Labor
1. Indonesia shall adopt and implement a prohibition on the importation of goods mined, produced, or manufactured wholly or in part by forced or compulsory labor. Indonesia may recognize U.S. government determinations on entities under Section 307 of the Tariff Act and, in the event that Indonesia recognizes such determinations, shall take actions appropriate to prohibit importation of goods from those entities into Indonesian territory. Indonesia shall implement the obligations in this paragraph within two years of the date of entry into force of this Agreement.
2. Indonesia shall protect internationally recognized labor rights. (4) This includes by adopting or maintaining such rights in its law and practice, and effectively enforcing its labor laws, including by creating or maintaining necessary institutions to protect labor rights. Indonesia shall establish and effectively apply appropriate legal sanctions for violations of those laws. Indonesia shall not weaken or reduce the protections in its labor laws and shall address any such weakening or reduction that has been made to encourage trade or investment to date. (5) In addition, Indonesia shall address issues related to labor rights that contribute to non-reciprocal trade.
Article 2.10. Environment
Indonesia shall adopt and maintain environmental protections, effectively enforce its environmental laws, uphold or institute as necessary strong environmental governance structures, and address environment-related issues that contribute to non-reciprocal trade.
Article 2.11. Customs and Trade Facilitation
Indonesia shall maintain or implement technology solutions that allow for full pre-arrival processing, paperless trade, and digitalized procedures for the movement of goods of the United States across its borders.
Article 2.12. Border Measures and Taxes
1. Indonesia shall coordinate and endeavor to align its border measures applicable to third-country imports with relevant border measures that the United States may adopt in the future, such as border-adjusted tax measures or other border measures, to combat regulatory arbitrage that would disadvantage U.S. workers and businesses.
2. Indonesia shall not impose value-added taxes that discriminate against U.S. companies in law or in fact.
Section 3. Digital Trade and Technology
Article 3.1. Digital Services Taxes
Indonesia shall not impose digital services taxes, or similar taxes, that discriminate against U.S. companies in law or in fact.
Article 3.2. Facilitation of Digital Trade
Indonesia shall facilitate digital trade with the United States, including by:
(a) refraining from measures that discriminate against U.S. digital services or U.S. products distributed digitally;
(b) ensuring the transfer of data by electronic means across trusted borders with appropriate protection for the conduct of business; and
(c) collaborating with the United States to address cybersecurity challenges.
Article 3.3. Digital Trade Agreements
Indonesia shall communicate with the United States before entering into a new digital trade agreement with another country that jeopardizes essential U.S. interests.
Article 3.4. Market Entry Conditions
1. Indonesia shall not impose any condition or enforce any undertaking requiring U.S. persons to transfer or provide access to a particular technology, production process, source code, or other proprietary knowledge, or to purchase, utilize, or accord a preference to a particular technology, as a condition for doing business in its territory. This Article shall not apply to government procurement.
2. This Article does not preclude a regulatory body or judicial authority of a Party from requiring a person of another Party to preserve and make available the source code of software, or an algorithm expressed in that source code, to the regulatory body for a specific investigation, inspection, examination, enforcement action, or judicial proceeding, subject to safeguards against unauthorized disclosure.
Article 3.5. Customs Duties on Electronic Transmissions
Indonesia shall not impose customs duties on electronic transmissions, including content transmitted electronically, and shall support multilateral adoption of a permanent moratorium on customs duties on electronic transmissions at the WTO immediately and without conditions. For greater certainty, this Article shall not preclude Indonesia from imposing internal taxes, fees, or other changes on electronic transmissions in a manner not inconsistent with Articles I and III of the GATT 1994 or Articles II and XVII of the WTO General Agreement on Trade in Services.
Section 4. Rules of Origin
Article 4.1. General Provision
The Parties intend for the benefits of this Agreement to accrue substantially to them and their nationals. If benefits of this Agreement are accruing substantially to third countries or third-country nationals, a Party may establish rules of origin necessary to achieve the Parties? intention for this Agreement.
Section 5. Economic and National Security
Article 5.1. Complementary Actions
1. If the United States imposes a customs duty, quota, prohibition, fee, charge, or other import restriction on a good or service of a third country and considers that such measure is relevant to protecting the economic or national security of the United States, the United States intends to notify such measure to Indonesia for the purpose of economic and national security alignment. Upon receiving such notification from the United States, to address a shared economic or national security concern identified by the Parties, Indonesia shall adopt or maintain a measure with equivalent restrictive effect as the measure adopted by the United States, guided by principles of goodwill and a shared commitment to enhancing bilateral relations between the United States and Indonesia.
2. At the request of the United States, Indonesia, in accordance with its national interest and domestic laws and regulations, shall adopt and implement measures to address unfair practices of companies operating in Indonesia and owned or controlled by third countries when such practices, in Indonesia's jurisdiction, result in:
(a) the export of below-market price goods to the United States;
(b) increased exports of such goods to the United States; or
(c) a reduction in U.S. exports to Indonesia or to third-country markets.
3. Indonesia shall adopt, in accordance with its domestic laws and regulations, similar measures of equivalent restrictive effect as those adopted by the United States to encourage shipbuilding and shipping by market economy countries. The Parties shall discuss the structure and effect of such measures.
Article 5.2. Export Controls, Sanctions, Investment Security, and Related Matters
1. Indonesia shall, in accordance with its domestic laws and regulations, cooperate with the United States with a view to restricting transactions of its nationals with individuals and entities included on the U.S. Department of Commerce Bureau of Industry and Security Entity List (Supplement 4 of Part 744 of the Export Administration Regulations), as well as the U.S. Department of the Treasury Office of Foreign Assets Control Lists of Specially Designated Nationals and Blocked Persons List (SDN List) and the Non-SDN Consolidated Sanctions List.
2. Indonesia shall establish and apply a mechanism for reviewing inbound investment for national security risks and shall cooperate with the United States on matters related to investment security.
3. If the United States determines that Indonesia is cooperating to address shared national and economic security issues, the United States may take such cooperation into account in administering its laws and regulations pertaining to export controls, investment reviews, and other measures.
4. Indonesia shall, through its domestic regulatory process, cooperate with the United States to regulate the trade in national security-sensitive technologies and goods through relevant existing multilateral export control regimes, align with U.S. export controls and ensure that its companies do not backfill or undermine these controls.
Article 5.3. Other Measures
1. The United States shall work with Indonesia to streamline and enhance defense trade.
2. Indonesia shall, in accordance with its domestic laws and regulations, adopt and effectively enforce provisions to combat transshipment and other practices to evade or circumvent duties and other measures applied by the United States. Indonesia and the United States shall enter into a duty evasion cooperation agreement.
3. If Indonesia enters into a new bilateral free trade agreement or preferential economic agreement with a country that jeopardizes essential U.S. interests, the United States may, if consultations with Indonesia fail to resolve its concerns, terminate this Agreement and reimpose the applicable reciprocal tariff rate set forth in Executive Order 14257 of April 2, 2025.
Section 6. Commercial Considerations and Opportunities
Article 6.1. Investment
1. Indonesia shall allow and facilitate U.S. investment in its territory to explore, mine, extract, refine, process, transport, distribute, and export critical minerals and energy resources and to provide power generation, telecommunication, transportation, and infrastructure services on terms no less favorable than it accords to its own investors in like circumstances and shall regulate those investments in keeping with minimum standards of international law.
2. The United States shall work through U.S. institutions such as the Export-Import Bank of the United States (EXIM Bank) and the U.S. International Development Finance Corporation (DFC), if eligible, to consider supporting investment financing in critical sectors in Indonesia in collaboration with U.S. private sector partners, consistent with applicable law.
3. Indonesia shall facilitate job-creating, greenfield investment in the United States.
Article 6.2. Commercial Considerations
1. Indonesia shall ensure that its State-Owned or Controlled Enterprises (SOEs), when engaging in commercial activities: (1) act in accordance with commercial considerations in their purchase of goods or services; (2) refrain from discriminating against U.S. goods or services; and (3) refrain from subsidizing domestic goods producers, except to fulfil any public service mandate. Indonesia shall refrain from providing non-commercial assistance or otherwise subsidizing its goods-producing SOEs, except for the achievement of their public service mandate. Indonesia shall ensure a level playing field for U.S. companies in Indonesia's market with regard to SOEs of non-Parties.
2. Upon the written request of the United States, Indonesia shall provide information regarding all forms of non-commercial assistance or subsidies that it provides to a manufacturing enterprise in its territory and shall take action to address the distortive impacts of those subsidies and support mechanisms at the central level on trade and investment with the United States.
Article 6.3. Textiles
The United States commits to establish a mechanism that will allow for certain textile and apparel goods from Indonesia to receive a zero reciprocal tariff rate. This mechanism will provide that a to-be-specified volume of apparel and textile imports from Indonesia can enter the United States at this reduced tariff rate, but this volume shall be determined in relation to the quantity of exports of textiles, e.g., U.S. produced cotton and man-made fiber textile inputs, from the United States.
Article 6.4. Purchases
Indonesia shall facilitate the purchase, by Indonesian companies, of originating goods of the United States as set out in Annex IV.
Section 7. Implementation, Enforcement, and Final Provisions
Article 7.1. Annexes, Appendices, and Footnotes
The annexes, appendices, and footnotes to this Agreement constitute an integral part of this Agreement.
Article 7.2. Modifications and Amendments
The Parties may agree, in writing, to amend this Agreement. An amendment to this Agreement shall enter into force 60 days after the date on which the Parties exchange written notification of the completion of their respective applicable legal procedures or on such other date as the Parties may agree.
Article 7.3. Enforcement and Implementation
1. Nothing in this Agreement shall prevent, or otherwise constrain, a Party from imposing additional tariffs to remedy unfair trade practices, to address import surges, to protect its economic or national security, or for other similar reasons consistent with its domestic law.
2. If a Party considers that the other Party has not complied with a provision of this Agreement, that Party may review the terms of this Agreement and take action in accordance with its domestic law. (6)A Party shall, when practicable, with a view to finding a mutually satisfactory solution, notify and seek consultations in good faith with the other Party prior to taking any action.
3. To the extent that a Party experiences:
(a) an import surge (7) of goods from the other Party; or
(b) an increase in the bilateral trade deficit following implementation of this Agreement, that Party may request consultations with the other Party.
Article 7.4. Termination
Either Party may terminate this Agreement by providing written notice of termination to the other Party. Termination shall take effect 30 days after the date of such notification. When practicable, a Party shall provide the other Party an opportunity to consult before providing such notice.
Article 7.5. Entry Into Force
This Agreement shall enter into force 90 days after the date on which the Parties have exchanged written notifications certifying completion of their applicable legal procedures or on such other date as the Parties may decide.
Conclusion
Annex III. Specific Commitments
Section 1. Tariffs and Quotas
Article 1.1. Other Taxes and Fees
Indonesia shall review and, as appropriate, amend its internal taxes and other internal charges to ensure alignment with the requirement to not maintain or adopt internal taxes or internal charges of any kind in excess of those applied, directly or indirectly, to like domestic products.
Section 2. Non-Tariff Barriers and Related Matters
Article 2.1. Import Licensing
Indonesia shall submit its annual questionnaire on import licensing procedures to the WTO Committee on Import Licensing as provided in Article 7.3 of the WTO Agreement on Import Licensing Procedures.
Industrial Goods
Article 2.2. Local Content and Domestic Specification Requirements
1. Indonesia shall exempt U.S. companies and U.S. goods from local content requirements.
2. Indonesia shall remove forced domestic specification usage and processing requirements.
Article 2.3. Testing and Certification Procedures
1. Indonesia shall allow testing and certification for information communications technologies (ICT) goods to be completed by accredited U.S. conformity assessment bodies and address redundance and costs from product compliance certification requirements.
2. Indonesia shall remove duplicative requirements, including requirements for shipmentspecific testing and certification, for testing of heavy metals in cosmetics.
Article 2.4. Cabotage Policy Exemptions
Indonesia shall grant exemptions, as is done with oil and gas surveys and drilling, to its cabotage policy for foreign-flagged vessels involved in installing telecommunication cables on or below the sea surface, except with respect to vessels associated with any country of concern.
Article 2.5. Medical Devices & Pharmaceuticals
1. Indonesia shall accept a prior marketing authorization approval or clearance that is issued by the U.S. Food and Drug Administration (FDA) as sufficient evidence that a medical device manufactured in the United States meets Indonesia’s requirements for marketing authorization, and shall not require marketing authorization for low-risk medical devices where approval or clearance is not required by the FDA.
2. Indonesia shall recognize audits and certificates of device manufacturers’ quality management systems that are in accordance with the requirements established by the Medical Device Single Audit Program (MDSAP) and conducted by auditing organizations authorized by the regulatory authorities participating in MDSAP to audit under the MDSAP requirements, and shall not impose additional regulatory requirements beyond those required for MDSAP.
3. Indonesia shall accept the FDA’s electronic certificates to foreign governments (eCFGs) for medical devices and the FDA’s electronic certificates for pharmaceutical products (eCPPs) as sufficient evidence that these products meet Indonesia’s approval requirements, and shall not require hard copies, original copies, authenticated copies, wet signatures, or apostilles of the FDA certificates.
4. Indonesia shall accept a prior marketing authorization that is issued by the FDA as sufficient evidence that a pharmaceutical product manufactured in the United States meets Indonesia’s requirements for marketing authorization in its country.
5. Indonesia shall not require periodic re-authorization for a pharmaceutical product that has previously received marketing authorization from the United States, unless Indonesia identifies a significant safety, effectiveness, or quality concern.
6. Indonesia shall accept the results of an FDA good manufacturing practice surveillance inspection of a manufacturing facility for pharmaceutical products without further need for an inspection or reinspection performed by Indonesia’s relevant regulatory authorities when the following conditions apply:
(a) the manufacturing facility is within the territory of the United States; and
(b) the most recent FDA inspection report, as provided by the facility, is classified as no action indicated, demonstrating no objectionable conditions or practices.
Article 2.6. Motor Vehicles and Parts
1. Indonesia shall:
(a) accept vehicles and vehicle parts that are manufactured to comply with U.S. Federal Motor Vehicle Safety Standards (FMVSS) and U.S. emissions standards and sold in the United States; and
(b) accept U.S. compliance procedures for automotive products without requirements for U.S. vehicles to undergo additional processes to enter Indonesia’s market.
2. Indonesia shall address any other standards or requirements that discriminate against U.S. vehicles and vehicle parts.