Technical Assistance II
Indonesia is recognised as a proactive and influential member of the World Trade Organisation (WTO). The country has been actively involved in numerous negotiations at the WTO, advocating not only for its national interests but also for those of other developing countries in an effort to shape a more equitable global trading system.
The Directorate General of International Trade Negotiations at the Ministry of Trade has organised a series of capacity building activities in collaboration with ARISE+ Indonesia. These activities encompass the development and presentation of six concept notes related to negotiation issues at the WTO, the creation of a framework to proactively monitor and address foreign non-tariff barriers (NTBs) faced by Indonesian companies, the development of an institutional framework for Indonesia to comply with its WTO notification obligations on import licensing requirements, and training sessions on the use of these frameworks. This initiative is designed to equip negotiators and trade analysts in the Directorate of WTO Negotiations with the necessary skills, knowledge, and tools to effectively engage in WTO negotiations, protect national interests, and contribute to the country's economic development goals.
We recently had the opportunity to speak with Mr. Wijayanto, the Director of WTO Negotiations, about Indonesia's role in advocating for improved market access for goods and services in the WTO forum, as well as its collaboration with ARISE+ Indonesia.
Here is an excerpt from the interview.
Q: What are the current areas of the WTO negotiations where Indonesia is actively involved? Could you please tell us about these negotiations and explain why they are important?
A: We recently participated in the 13th WTO Ministerial Conference (MC13) in Abu Dhabi, held from 26 February to 2 March 2024. The Indonesian delegation, led by the Director General for International Trade Negotiations at the Ministry of Trade, was actively engaged in several key trade negotiations, including those on agriculture, fisheries subsidies, WTO reform, and a moratorium on customs duties on electronic transmissions (CDET). These issues are of paramount importance to Indonesia as a developing country, making it crucial to closely monitor the negotiation process to ensure favourable outcomes for our nation.
Although the negotiations were extended by one day due to a deadlock, with no agreement being reached, we were able to safeguard our national interests and ensure that the outcomes were not detrimental to our country.
To enrich our materials and enhance preparation for the negotiations, we collaborated with ARISE+ Indonesia to develop six concept notes on strategic negotiation issues for Indonesia. These concept notes discuss the four topics mentioned above, with the other two being negotiations on environmental issues, and negotiations on micro, small, and medium enterprises (MSMEs).
Indonesia's active role in the fisheries subsidy negotiations underscores its commitment to the sustainability and preservation of fisheries resources. Nonetheless, Indonesia also prioritises the welfare and protection of small-scale fishers, particularly in developing countries.
Similarly, in agriculture, Indonesia's focus is on safeguarding the interests of impoverished and small farmers and ensuring food security, particularly amidst the current global crises and challenges.
We also strongly advocate for dispute settlement reform, a key element of the WTO reform negotiations. At MC13, we successfully protected our national interests by emphasising the importance of maintaining the two-tier dispute settlement system and ensuring that issues related to the appeals mechanism are addressed. Our goal is to render the dispute settlement system fully operational and accessible to all WTO members by 2024 as mandated by the Ministers at the MC12.
Q: What are Indonesia's strategic goals in the ongoing WTO negotiations? How do these align with the broader economic objectives of the country?
A: Indonesia's strategic goal in the ongoing WTO negotiations is to ensure widespread acceptance of its stance on key issues that impact the livelihoods of our people, particularly small farmers and fishers. Additionally, Indonesia is committed to addressing non-tariff barriers (NTBs) and protectionist practices that may impede international trade. If necessary, Indonesia could exercise its rights to initiate litigation to safeguard its interests under the WTO agreements, including market access.
As outlined in the National Medium-Term Development Plan (RPJMN) 2020-2024, Indonesia is committed to strengthening its role in international trade diplomacy and negotiations, including in the WTO forum. This commitment supports our goals of inclusive and sustainable economic growth, improved market access in partner countries, and increased investment. The disruptions in the global trade supply chain caused by the COVID-19 pandemic, together with the rise of protectionist measures and inward-looking trade policies worldwide, underscore the urgency for Indonesia to actively participate in any efforts to restore global confidence in the multilateral trading system.
Overall, Indonesia’s strategic objectives are in line with the WTO's goals, which are not only to foster sustainable economic growth but also to enhance the welfare of people, increase international trade capacity, and strengthen Indonesia’s position in the global market.
Q: Indonesia is known for its active role in championing the interests of developing countries in global trade forums. Could you elaborate on the strategies and initiatives Indonesia has implemented within the WTO to advocate for the rights and trade interests of developing nations? How does Indonesia's approach influence its negotiations and partnerships in the global trade arena?
A: Indonesia has adopted several strategic initiatives within the WTO to ensure that the rights and interests of developing and least-developed countries (LDCs) are upheld, including joining a coalition of developing country members that emphasises the importance of Special and Differential Treatment (S&DT) and capacity building programmes. This coalition is committed to creating a level playing field in global trade.
In agriculture negotiation, Indonesia chairs the G-33 group —a coalition of 47 developing countries and LDCs. Indonesia plays a proactive role in advocating for the rights and flexibilities of developing nations in agriculture negotiations. One of the main objectives of the G-33 is to support small and impoverished farmers who face increasing marginalisation due to the high volatility of global agricultural product prices caused by market openness. This challenge is compounded by the low competitiveness of agricultural products from developing countries compared to those from developed countries, which benefit from substantial government supports. Indonesia continues to strive for balanced agreements that protect farmers' interests and support public stockholding for food security purposes.
Additionally, Indonesia, along with like-minded countries, actively submits proposals in other WTO negotiating forums to support the position of developing countries. These proposals address critical issues such as dispute settlement reform and fisheries subsidy negotiations.
Indonesia has consistently prioritised an approach based on the common interests shared by fellow developing countries to secure fair and balanced negotiation outcomes. This strategy not only enhances Indonesia's negotiating posture but also strengthens its role as a key player in WTO negotiations. Moreover, it bolsters Indonesia's cooperation with other WTO member countries that have similar interests, fostering robust partnerships and collaborative efforts in the global trade arena.
Q: What are some of the significant trade barriers that Indonesia is currently working to negotiate away in the WTO discussions?
A: Currently, several of our trading partners are implementing protectionist measures under the guise of environmental protection to shield their domestic industries. Some of the policies related to environmental protection enacted by developed countries that could potentially harm Indonesia's interests include the Carbon Border Adjustment Mechanism (CBAM), Maximum Residue Levels (MRLs), Waste Shipment Regulations, and Deforestation-Free Regulations.
These policies may restrict the export of key Indonesian products and adversely impact the economy of Indonesia and other developing countries. The affected products are diverse and cover some of Indonesia’s top exports such as palm oil, coffee, cocoa, wood products, aluminum, iron and steel, cement, and fertilisers.
While Indonesia supports environmental policies and understands the need to protect domestic industries, these measures should not be discriminatory or inconsistent with the collaborative spirit of the WTO, nor should they unduly burden developing countries and least-developed countries (LDCs).
Indonesia is actively negotiating in both bilateral and multilateral forums with the concerned partner countries to ensure that these policies are enforced in accordance with WTO provisions and do not constitute unnecessary barriers to international trade.
We need to prioritise the fairness principle in international trade. In this regard, developed countries should assist developing and least developed countries, enabling them to grow and trade on an equal footing. We are aware that each country may have different interests. However, we have to underline that by participating in the WTO forum, our aim is to find common ground in a collaborative spirit amidst these differences. I think this is the benefit of being part of the WTO that we should maintain.
Q: What are the positive outcomes of the WTO negotiations for Indonesia's domestic industry?
A: The positive implications of WTO negotiations on Indonesia's domestic industries include opening new market access in trading partner countries through the reduction or elimination of trade barriers; decreasing production costs and increasing competitiveness for Indonesian products as domestic industries benefit from cheaper production inputs; and enhancing trade facilitation, thereby reducing logistics-related costs.
Q: What are the main challenges Indonesia faces in WTO negotiations?
A: Decisions at the WTO are made by consensus, requiring agreement from all 164 member countries, including recent addition like Comoros and Timor-Leste. The complexity of global trade and the considerable divergence in interests among Member countries have added another layer of difficulties, often prolonging the decision-making process. Any disagreement calls for extended discussion and further negotiation.
In this context, Indonesia places a high priority on the negotiation of mechanisms like the Special Safeguard Mechanism (SSM). The SSM is crucial for protecting Indonesia’s domestic agricultural sector from sudden and significant surges in imports that can destabilise local markets. However, finalising agreements on such mechanisms is challenging, as not all WTO members agree on the terms, reflecting a broader struggle to balance national interests with global trade rules.
Q: How does the collaboration with ARISE+ Indonesia enhance your department's capabilities and effectiveness in WTO negotiations?
A: We are happy and grateful for the capacity-building and networking programme supported by ARISE+ Indonesia. I believe this program is highly beneficial and significantly enhances the capabilities and understanding of our trade negotiators and analysts at the Ministry of Trade and other related ministries/agencies concerning international trade rules. This initiative strengthens our negotiation skills, enabling us to better represent and protect Indonesia's interests in the international arena.