Indonesia-US Trade Negotiations Enter Crucial Phase

Final Legal Drafting Underway

Indonesia and the United States are advancing their trade negotiations with a critical round scheduled for January 12-19, 2026. Coordinating Minister for Economic Affairs Airlangga Hartarto announced that the next phase will focus on the legal drafting of the Agreement on Reciprocal Trade (ART) ¹

. This stage is considered crucial as it precedes the signing of the agreement by President Prabowo Subianto and US President Donald Trump.

Key Developments in Trade Negotiations

The ART agreement has reached an advanced stage with the substantive elements already agreed upon by both countries. Airlangga explained that the remaining task is to finalize the legal drafting, which will then be followed by the formal signing ¹

. This development comes as a significant step forward in the trade relationship between the two nations.

Industry Support and Tariff Expectations

The Indonesian textile industry, represented by the Indonesian Textile Association (API), has been actively advocating for a reduction in tariffs on Indonesian textile and garment exports to the US. API has urged President Prabowo to engage directly with President Trump to push for these tariff reductions, emphasizing the importance of this issue for Indonesia's labor-intensive industries ³

.

Implications for Indonesian Economy

The successful signing of the ART could have significant implications for Indonesia's economy, particularly in sectors that are heavily reliant on exports. A reduction in tariffs could boost Indonesia's textile and garment industry, potentially leading to increased economic activity and job preservation in this labor-intensive sector.