Indonesia’s Trade Policy Regime amidst Global Challenges

This policy brief discusses how Indonesia can enhance its trade policy by focusing on the Indo-Pacific region to strengthen its global economic position. It highlights the importance of fostering economic resilience, expanding trade partnerships, and leveraging Indonesia's strategic location in the Indo-Pacific to navigate global challenges.

Key Highlights:

• Indo-Pacific Strategy: Urges Indonesia to develop a comprehensive Indo-Pacific strategy to enhance trade relations and capitalize on emerging opportunities in the region. This includes deepening ties through ASEAN and leveraging platforms like APEC to promote regional collaboration and economic integration.
• Geopolitical neutrality: Stresses the need for Indonesia to maintain a balanced foreign policy, particularly amid U.S. China tensions, while taking advantage of its strategic location in global trade routes. This neutral stance helps Indonesia foster diplomatic and economic ties with both powers without compromising its independence.
• Regional economic integration: Highlights Indonesia's proactive engagement in regional agreements such as the Regional Comprehensive Economic Partnership (RCEP) to boost exports and increase participation in global value chains. The brief also underscores the importance of ongoing FTA negotiations with key Indo-Pacific economies, including India.
• Investment and regulatory reforms: Recommends enhancing regulatory transparency and reducing trade barriers to improve the business climate and attract investment from Indo-Pacific partners, which is critical for Indonesia’s sustained economic growth and competitiveness.

About the author

Dr Harry Wardana is an Economist at the Institute for International Trade, University of Adelaide.

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Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the Institute for International Trade or University of Adelaide ​