UNAIR NEWS Indonesia officially signs the Agreement on Reciprocal Tariff (ART) by opening around 99 percent of tariffs on goods from the United States (US). Responding to the policy, International Economics lecturer at 51动漫 (UNAIR), Dr. Unggul Heriqbaldi, SE, MSi, MAppEc, shared his perspective.
Dr. Heriqbaldi stated that in the perspective of international economics, trade agreements are not always symmetrical, but are influenced by economic power and bargaining position of each country. Structurally, the US has stronger bargaining power due to its large economic size and its domestic market becoming the main export destination for developing countries.
淚n many trade agreements, developing countries often provide greater concessions to maintain market access to developed countries. ART can be understood as Indonesia檚 strategy to maintain export market access, especially for labor-intensive manufacturing sectors such as textiles and footwear that heavily depend on the US market, he explained.
Impact of ART on Indonesia
Dr. Heriqbaldi mentioned that in international trade practice, reciprocity does not always mean identical tariff equality. If Indonesia opens more than 99 percent of tariffs for US products while Indonesia still faces tariffs up to 19 percent in the US market, then technically the relationship is not fully symmetrical.
淭his indicates that Indonesia檚 bargaining position in the negotiation is likely more focused on maintaining export market stability rather than demanding direct tariff equality. However, the government must ensure that the concessions are balanced with long-term strategic benefits such as technology transfer, investment, or integration into the global supply chain, he stated.
According to him, the agreement has the potential to increase competition in the domestic market. Industries with high production costs or outdated technology will face greater pressure. On the other hand, sectors that require raw materials or technology from the US may benefit through lower production costs.
淪ectors that are relatively vulnerable are usually domestic-market-oriented industries with low productivity, such as agricultural products, processed food, and light manufacturing. Meanwhile, sectors that may benefit are industries integrated in the global value chain such as textiles, electronics, as well as chemical and pharmaceutical industries, he added.
Indonesia檚 strategy
Dr. Heriqbaldi assessed that the increase in Indonesia檚 exports may offset the potential rise in imports. The zero-tariff opportunity can also become a strategic chance for the textile industry, considering that the US is one of the largest export markets for Indonesian textile and apparel products.
淚f the market is opened without a clear industrial strategy, Indonesia risks becoming only a consumption market for foreign products. However, if it is accompanied by policies to improve industrial productivity, technology investment, and strengthening domestic supply chains, agreements like this can become an entry point for Indonesia檚 integration into the global value chain, he explained.
He added several steps that Indonesia can take, including strengthening domestic industries through productivity and technology improvement, encouraging export-oriented manufacturing investment, developing upstream industries, improving industrial human resources quality, and utilizing trade agreements for technology transfer and investment.
Author: Putri Andini
Editor: Ragil Kukuh Imanto
