Indonesia signed a comprehensive free trade agreement with Japan in 2007. In February 2012, it signed a preferential trade agreement with Pakistan, which both governments intend to transform into a free trade agreement. But the Pakistani government reportedly refused to start new negotiations until concerns about the existing agreement were lifted. Starting with the Theodore Roosevelt government, the United States has become an important player in international trade, particularly with its neighboring territories in the Caribbean and Latin America. Today, the United States has become a leader in the free trade movement and supports groups such as the General Agreement on Tariffs and Trade (later the World Trade Organization). [Citation required] Here is a list of the free trade agreements that include the United States. In parentheses, the abbreviation, if any, membership, unless indicated in advance, and the date of entry into force. The United States is a party to many free trade agreements around the world. Indonesia, Southeast Asia`s largest economy, has experienced sustained economic growth over the past decade, averaging 5 to 6%, with moderate inflation, rising foreign direct investment and relatively low interest rates. Indonesia`s annual budget deficit is limited to 3% of GDP and the Indonesian government reduced its debt ratio by 100% immediately after the Asian financial crisis of 1999 to 30.1% in 2018. The growth of Indonesia`s middle class, strong domestic demand, large and young population and the need for new infrastructure make Indonesia an important potential market for American products and investment.
Bilateral merchandise trade between the United States and Indonesia totaled more than $29 billion in 2018, while bilateral trade in services was estimated at $3.9 billion. Major U.S. exports to Indonesia include soybeans, airplanes, mineral fuels, machinery and cotton. The stock of U.S. foreign direct investment in Indonesia was $11.1 billion in 2018, while Indonesia`s investment in the United States was $350 million over the same period. The United States continues to work with Indonesia to advance priorities for economic reforms, such as strengthening the investment climate and removing trade barriers such as protectionist laws, limited infrastructure and an unevenly enforced legal structure. Indonesia is an important partner in the Indo-Pacific region and relations between the United States and Indonesia are increasingly important. Indonesia is the third largest democracy in the world, the largest Muslim-majority country, the seventh largest economy in terms of purchasing power and the leader of ASEAN. It has the world`s largest marine biodiversity and its second largest terrestrial biodiversity. Indonesia also borders the South China Sea, which has the world`s busiest shipping routes – more than $5 trillion in cargo and up to 50% of the world`s tankers cross the South China Sea each year. The United States was one of the first countries to establish diplomatic relations with Indonesia in 1949, after its independence from the Netherlands. Indonesia`s process of democratization and reform since 1998 has strengthened its stability and security and strengthened relations between the United States and Indonesia.
In 2010, the United States and Indonesia established a comprehensive partnership to promote, among other things, high-level engagement in the areas of democracy and civil society, education, security, resilience and mitigation, maritime, energy and trade. Based on their success, the two countries strengthened their relationship with the strategic partnership between the United States and Indonesia in 2015 and extended their cooperation to issues of regional and global importance. The United States has begun negotiating bilateral and multilateral free trade agreements with the following countries and blocs: Indonesia is currently negotiating trade agreements with Australia, Chile, EFTA (European Free Trade Area)