Indonesia Trade Deal Faces Legal Challenge as Government Defends Ratification Process

Government Reassures on ART Ratification Despite Court Challenge

Indonesia's government has moved to quell concerns over the ratification process of its new trade agreement with the United States, asserting that proceedings will follow established legal procedures despite being challenged in court by civil society groups.

Trade Minister Budi Santoso confirmed on Friday that the Agreement on Reciprocal Trade (ART)—signed with the U.S. administration—remains on track for parliamentary review, with the ratification timeline mandated by Indonesia's 2014 Trade Law.

The Legal Framework

"According to the Trade Law, consultation and ratification must occur with the parliament," Minister Santoso said during remarks to journalists at the Trade Ministry office in Jakarta. "This process takes place after the agreement is signed and must be completed within 90 days."

Santoso emphasized that signature does not equate to completion of ratification. Rather, it marks the formal beginning of a process that will determine the legal instrument—whether through presidential decree (Perpres) or primary legislation—based on findings from parliamentary consultation.

Addressing Criticism

The government has faced accusations from parliament and civil society that lawmakers were sidelined from negotiations. Santoso rejected these claims, stating that the negotiation mechanism mirrors processes used in other bilateral trade discussions and adheres to established legal corridors.

"We signed the ART in compliance with the regulations. The methodology is identical to our trade negotiations with other countries," he explained.

U.S. Policy Uncertainty

Meanwhile, Indonesia must navigate shifting trade policies from Washington. The U.S. Supreme Court recently struck down a previous reciprocal tariff scheme, and the Trump administration may introduce new tariff policies affecting Indonesia—which is currently under U.S. Section 301 trade investigation.

"Within 150 days, the U.S. could implement new tariff policies. We don't know yet, but they are investigating Section 301 cases against several countries, including Indonesia," Santoso cautioned.

The ART ratification process will test Indonesia's ability to balance domestic parliamentary scrutiny with rapid U.S. trade policy shifts, amid broader regional economic uncertainty tied to ongoing geopolitical tensions.