【By Observer Net Columnist Shen Yi】

On July 22, the White House website released a statement announcing that the U.S. and Indonesia have reached an agreement on the framework for negotiations on a reciprocal trade agreement. The U.S. has reduced its "reciprocal tariff" rate to Indonesia to 19%; Indonesia has eliminated 99% of tariff barriers on imports from the U.S., significantly reduced non-tariff barriers, committed to purchasing a large amount of American goods, and pledged to cooperate with the U.S. in addressing unfair trade practices by third countries, enhancing collaboration in export controls, investment security, and other areas, and will also negotiate to strengthen rules of origin. Some people believe that the 19% reciprocal tariff is lower than that of several other Southeast Asian countries such as Vietnam, and Indonesia has "gained", which is a diplomatic "victory".

The U.S.-Indonesia trade agreement hides traps and may violate World Trade Organization (WTO) and regional free trade agreement principles. Both the U.S. and Indonesia are members of the WTO. The U.S. has set a 19% reciprocal tariff on Indonesia, which is significantly higher than the bound tariff rates the U.S. has committed to under the WTO,涉嫌 violating the tariff commitments. In addition, the agreement between the U.S. and Indonesia increases the U.S. import tariffs on Indonesian goods, which does not comply with the WTO's relevant regulations on free trade agreements. As a result, Indonesia's cancellation of 99% of tariff barriers on U.S. goods outside the framework of free trade agreements must be equally applicable to all WTO members; otherwise, it would be suspected of violating the Most-Favored-Nation (MFN) treatment principle.

According to the provisions of the Regional Comprehensive Economic Partnership (RCEP), any non-tariff measures should not create unnecessary obstacles to trade between the signatories. As a signatory, if Indonesia raises its current origin standards or arbitrarily tightens origin verification, it would be suspected of violating the above RCEP provisions. At the same time, Indonesia has the obligation to strictly verify the origin of goods exported to each member under the RCEP, ensuring the effective implementation of RCEP origin rules, and preventing non-signatory goods from "free-riding" and harming the interests of RCEP members.

China and Indonesia's economic and trade interests are deeply integrated. Trading China's interests for the U.S. market is "not worth it." The U.S. uses its market advantage to pressure Indonesia into an unfair trade agreement, which contains the core of containing and suppressing China, and is another example of "American bullying." If Indonesia sacrifices the Chinese market to obtain the U.S. agreement, it is like "taking the sesame seed but losing the watermelon."

China has been the largest trading partner of Indonesia for 12 consecutive years. According to data from the Indonesian government, in 2024, the trade volume between Indonesia and China was $135.2 billion, far exceeding Indonesia's $38.3 billion in trade with the U.S. Among them, Indonesia's exports to the U.S. were $26.31 billion, accounting for 9.9% of Indonesia's total exports, less than 2% of Indonesia's GDP. At the same time, China invested $16.33 billion in Indonesia, while the U.S. invested $3.7 billion, four times that of the U.S.

"If the West is not bright, the East is bright; if the North is not bright, the South is bright." In recent years, Chinese investment in Indonesia has developed vigorously, and landmark projects such as the Jakarta-Bandung High-Speed Railway have driven rapid economic development in the region. Indonesia is well aware of this economic calculation. If it sacrifices its economic relationship with China to please the U.S., it will undermine the confidence and willingness of Chinese companies to conduct trade and investment with Indonesia, leading to a boomerang effect that will bring "retaliation" to Indonesia.

If the relevant trade agreement harms China's interests, China will take decisive action to safeguard its legitimate rights and interests. The Ministry of Commerce spokesperson has repeatedly stated China's position and bottom line. China firmly opposes any party using the sacrifice of China's interests as a means to reach a deal. If such a situation occurs, it will resolutely counteract and protect its legitimate rights and interests.

Currently, the tariff negotiations between Indonesia and the U.S. are still ongoing, and the specific content remains to be clarified. The progress needs to be closely monitored. If the final terms sacrifice China's interests for exemptions, it will face a strong counterattack. Former U.S. Secretary of State Henry Kissinger said, "It is dangerous to be an enemy of the United States, but it is deadly to be its ally." The U.S. is trying to use reciprocal tariff negotiations to lure some countries to block Chinese components and Chinese parts. If Indonesia proactively hands over a "letter of submission" to the U.S. and cooperates with the U.S. in setting discriminatory measures against China, or even causes substantial damage to China's economic and trade interests, it is equivalent to "seeking to make a deal with a tiger," which will inevitably affect the current good cooperation between China and Indonesia, and ultimately end up with both sides losing out.

Seventy years ago, leaders of China, Indonesia, and many Asian and African countries gathered in Bandung, sending out a historical message of unity, friendship, and cooperation. China and Indonesia are both developing countries, and they should carry forward the spirit of "Bandung" in the new era, jointly shoulder the banner of free trade, safeguard the multilateral trading system, actively advocate an inclusive and prosperous economic globalization, which is in line with the long-term interests of both countries, and will inject more certainty and stability into regional and global development. Indonesia should be vigilant against the U.S. strategy of "dividing and ruling" in the Asia-Pacific region, prevent being led by the U.S., and avoid seeking so-called short-term "victories" that erode the foundation of the multilateral trading system, restrict their own long-term development potential, and "betray" sincere friendly neighbors.

For those countries that, in pursuit of short-term interests or geopolitical advantages, are willing to sacrifice valuable policy space, even violating China's interests, to achieve a trade agreement with the U.S., it's time to ask themselves: who is really the winner of such a "victory"? What is the cost?

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Original: https://www.toutiao.com/article/7538037377579696680/

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