• International Trade Organizations

Indonesia is a member of several important international trade organizations. Its presence in and membership of these organizations provides it, as well as the other countries which are also members, with many significant advantages which it uses to improve its economic condition.

Why Indonesia Is a Part of International Trade Organizations

Rapid international trade growth has led to the global development of industry sectors such as product and service standardization. Therefore, to be competitive, products and services sold to a foreign market have to fulfill minimum specifications. Standards are often used by the government of a particular country as a means of defending the country’s market from being overrun by foreign products and services which would eventually damage the condition of the domestic economy. Membership of an international trade organization can aid in the creation of such standards in any country. Standards in most Indonesian sectors are generally followed because of such memberships. Many of these standards apply to products and services which are locally produced, manufactured, and exported.

In recent years, the nation has experienced a trade deficit. This is due to the fact that exports from Indonesia have declined. This decline has been caused by changes in the global economic landscape. Consequently, imports have increased. Indonesia is today a net importer of oil due to its rapidly growing domestic consumption. Gas, coal, electrical appliances, and machinery are Indonesia’s main exports today. The countries which are Indonesia’s primary trading partners today are China, Japan, and the United States. Indonesia has become a leading economy at both the regional and global levels. It is a member of both the G20 and Association of Southeast Asian Nations (ASEAN).

Indonesia has experienced rapid growth and expansion of its financial sector. This was especially true during the last quarter of the 20th century. Although the impact of the 1997-1998 Asian financial crisis temporarily stalled Indonesia’s economic growth, the country’s economic stability has since been restored while poverty levels in the country continue to decline.

Indonesia’s Role as a Member of the Association of Southeast Asian Nations (ASEAN)

​The Indonesian Ministry of Foreign Affairs has placed much emphasis on regional strategic collaboration in order to achieve national objectives. This is primarily done through its interactions with other members of ASEAN; these interactions serve as the foundation of Indonesia’s foreign policies. As a member of ASEAN, Indonesia is also a member of ASEAN + 3. ASEAN + 3 includes all ASEAN members as well as Japan, China, and South Korea.

Indonesia’s membership of ASEAN serves as a reflection of its foreign policies. Due to its considerable regional influence, enormous population, strategic geographic location, and wealth of natural resources, Indonesia is one of the most important members of ASEAN. This fact is reflected through Indonesia’s regional contributions in the fields of security and economics. These contributions made by Indonesia provide international public services, help alleviate regional conflicts, and strengthen institutions across Southeast Asia. The nation has also played a vital role in establishing a stable and independent security environment in Southeast Asia. Indonesia’s role in resolving the Cambodian crisis was pivotal. It also holds considerable influence with regard to territorial rights in the South China Sea. It has also emphasized the building of institutional structures which would foster the regional improvement of stability, democracy, and human rights. However, Indonesia’s role as an ASEAN member is also compromised because of its opposition to the independence of a local framework as well as the parliamentary model of domestic governance.

Indonesia’s Role as a Member of the World Trade Organization (WTO)

The only international trading body is the World Trade Organization (WTO). Established in 1995, the WTO’s principles are based on several conventions which a number of countries around the world have ratified. The aim of the WTO agreements is the regulation of the activities of suppliers, exporters, and importers of goods and services. The WTO was originally formed through a combination of agreements such as the Uruguay Round, the General Agreement on Tariffs and Trade (GATT), as well as several other previous agreements. The WTO currently includes 154 member states. Of these member states, 117 of them are either emerging or independent customs zones. From 2001 to 2008, the WTO was a platform for talks on the Doha Development Agenda (DDA). However, these talks have since been discontinued and are unlikely to return.

Decisions of the WTO are made via a consensus among all the member countries. The largest organ in the World Trade Organisation is the Ministerial Conference. The General Council’s decision-making processes are carried out between the Ministerial Conference and the WTO. Subordinate entities, including the executive committee and sub-committee, have the responsibility of enforcing and supervising the WTO agreements of member countries. The primary goals of the WTO are the pursuit of transparency of regional boundaries, the enforcement of non-discrimination by and between member nations, and accountability in all operations of member nations. The WTO aims to enable and promote economic growth, improve the general well-being of those living in its member states, reduce global poverty, and increase levels of peace and security so as to open up of a national market for the purposes of international trade. The WTO has also emphasized that market transparency is also to involve suitable national and international principles which would usually lead to the economic growth of each member state.

Indonesia’s primary role within the WTO has been based on its role within the DDA negotiations. In order to promote economic growth and to alleviate poverty, Indonesia’s involvement and role in the DDA negotiations are based on national interests. Indonesia has also been involved in establishing positions in other groups within the WTO that support the achievement of the DDA’s development goals. Indonesia has also been engaged in issues which have major impacts upon the country, Such issues include those related to economic growth, intellectual property, climate change, and WTO rules governing multilateral trade. Indonesia has been a part of various meetings with many national leaders and members of delegations so as to address these issues. It has also taken part in various senior official meetings and Ministerial Conferences. It has done so in order to reach an arrangement which would provide developing countries with the capacity to support small and poor peasants.

Indonesia has found that everything within the WTO to which it has thus far agreed may serve as a basis for further negotiations. It is extremely unlikely that attempts to revisit the general agreement that has already been reached would change the current balance and reverse the progress which has already made. Indonesia has remained active in applying pressure upon the WTO to revive the Doha talks. Indonesia is open to new methods of completing the negotiations. However, it also insists that the single enterprise concept be upheld and the economic growth of developing countries be prioritized.

Indonesia’s Role as a Member of the Asia-Pacific Economic Cooperation (APEC)

The Asia-Pacific Economic Cooperation (APEC) is a cooperation platform founded in 1989. It includes 21 economies which border the Pacific Ocean. Today, there are 21 APEC members. These are Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, the United States, and Vietnam. Members of APEC are labelled as economies because every participant functions as an economic entity rather than as a region or country.

The main objectives of APEC are the promotion of economic growth and the improvement of the level of stability in the Asia-Pacific region. These objectives are to be accomplished through the promotion of free trade and investment in the region as well as cooperation in the development of the economic capabilities of members.

Indonesia has taken advantage of many benefits which it has received through its membership of APEC. As a member of APEC, it has been able to establish closer ties with government and economic representatives of other countries which are policy partners of Indonesia as well as fellow APEC members at the same time. The technical training and knowledge provided by APEC authorities have also been of great benefit to Indonesia. Indonesia has also used its membership of APEC as a means of encouraging people from other APEC countries to invest in Indonesia and its economy. Indonesia has also managed to improve the connectivity of the country through cooperation with other countries with regard to development of and investment in infrastructure, improvement of educational standards, emergency responses during times of natural disasters, and facilitation of tourism in the country.

Indonesia plays an important role within APEC. It has attempted to promote regional economic development. It does so through trade and investment collaborations as well as through membership of the multilateral trade system. It has also sought to promote fair and sustainable economic growth and has advocated for greater emphasis on issues by which it is directly affected. Such issues include food security, marine issues, and the role of women in the economy. Indonesia has also been actively supporting international maritime cooperation among APEC members. It has also attempted to strengthen the synergies between APEC and various regional and international organizations to better address all challenges that hinder economic growth in the area. It has suggested approaches including the development of cooperation between organizations as well as the improvement of trade structures and cooperation in order to foster development in the region.

Indonesia’s Role in International Trade Organizations FAQs

Why did Indonesia join APEC?2020-04-02T15:03:08+08:00

In 1989, Indonesia became one of the 12 founding members of APEC. Each of the countries involved in founding APEC, including Indonesia, did so in order to increase the level of regional cooperation among all countries involved, particularly with regard to economic matters. 

How has Indonesia’s domestic oil consumption increase?2020-04-02T15:03:26+08:00

The latest statistics show that approximately 1,785 barrels of oil are consumed every day in Indonesia. This figure represents a steep increase from that of a decade prior, when it stood at around 1,288 barrels per day. For this reason, Indonesia has had to increase the amount of oil which it imports.

Is Indonesia expected to leave any major international trade organizations?2020-04-02T15:01:53+08:00

There has not been any speculation regarding the cessation of Indonesia’s membership in any international trade organizations. Therefore, it can be concluded that Indonesia will remain a member of each organization of which it is currently a member for the foreseeable future.

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