Indonesian Minister of Trade Budi Santoso is scheduled to attend the G20 Trade Ministers’ Meeting (G20 TMM) on September 30–October 1, 2026, in Milwaukee, Wisconsin, United States. Trade ministers from G20 member countries discuss priority trade agendas under the G20 United States Presidency. Amid advanced industrial countries shaping the direction of global trade, Indonesia’s position is part of efforts to maintain a rules-based multilateral trading system.
Associate Professor in the Department of International Relations at UGM’s Faculty of Social and Political Sciences (Fisipol UGM) and Director of the UGM Center for World Trade Studies (PSPD), Dr. Maharani Hapsari, S.IP., M.A., said that current global trade dynamics cannot be separated from the interests of major economic powers. Indonesia needs to uphold the principles of multilateral trade while also protecting its interests as a country still in transition toward becoming an industrialized nation.
“I think Indonesia remains consistent in adhering to the principles related to our position as a country in transition. The somewhat tricky part is how Indonesia can leverage its position to establish its legitimacy in the eyes of countries with advanced industries,” Dr. Maharani said in an interview on Thursday (Oct. 1).
Indonesia’s position makes policy space important. Such space is necessary to give Indonesia greater flexibility in implementing industrialization policies and strengthening domestic industries amid global trade competition.
This issue becomes increasingly important as global trade governance faces differing interests between developed and developing countries. Advanced industrial countries have substantial economic and political capacity to shape trade. On the other hand, developing countries continue to face dependence on commodities and need room to develop their industries.
In this context, the WTO remains an important forum for discussing and regulating global trade governance. However, the multilateral trading system also faces challenges as the national interests of major countries increasingly influence trade policies.
“The WTO remains one of the main arenas for debate within the broader framework of global trade governance,” she said.
This makes it necessary to promote the principle of nondiscriminatory trade. This is because changes in the forms of trade barriers can challenge the implementation of this principle in practice.
Trade barriers arise not only through tariffs but also nontariff barriers and increasingly complex regulations. Therefore, developing countries need the capacity to identify and understand these emerging forms of trade barriers.
“So, although on the surface we have an antidiscrimination principle, in practice there are processes that create new barriers and new, increasingly sophisticated forms of discrimination,” she explained.
The issue demonstrates that international trade does not operate solely on formal rules but is also influenced by each country’s economic and political interests. Therefore, Indonesia needs to pursue a strategy that does not depend on a single negotiating forum.
“Tariffs are indeed important, but tariffs do not stand alone. We have to look at how interdependence works,” she said.
In the context of Indonesia’s position, trade justice is important to bring to global trade forums. The benefits of international trade remain unevenly distributed between developed and developing countries.
“I think trade justice is a key principle, including in the context of South-South Cooperation. When we engage with countries with large economies, we also need to discuss how to manage the redistribution of global prosperity from trade,” she explained.
Therefore, Indonesia can use trade justice to build common interests with developing countries. Strengthening these relationships matters because Indonesia does not always have the capacity to engage advanced industrial countries on its own.
“It is appropriate for Indonesia to raise trade justice as part of its alliance-building approach with developing countries,” she said.
In addition to strengthening its position in multilateral forums, Indonesia also needs to strengthen its domestic capacity. Indonesia needs to gradually reduce dependence on commodity exports through industrialization strategies and increased value addition.
Strategic commodities such as palm oil and minerals should not remain limited to raw material exports. Developing industries from upstream to downstream should be supported by stronger research and development and closer links between universities and industry.
Strengthening domestic industries also requires financing, human resources, and investment policies that can boost employment and domestic industrial capacity.
At the same time, Indonesia needs to develop a more structured trade diplomacy strategy. Indonesia does not have to engage in every trade arena simultaneously but can establish a division of roles with developing countries.
“We cannot operate in every arena at the same time, but we have to divide the tasks,” Dr. Maharani added.
South-South Cooperation can help developing countries strengthen their position in the global trading system. Strengthening market networks and coordination among developing countries can also help them respond to changing rules and the interests of advanced industrial countries.
Therefore, Indonesia not only strengthens its position in multilateral forums but also expands its cooperation networks with countries in the Global South. This strategy needs to go hand in hand with strengthening domestic industries and increasing the value added of commodities.
“I think this South-South coalition has great potential,” she concluded.
Author: M. Aidil Syahputra
Editor: Gusti Grehenson
Post-editor: Jasmine Ferdian
Photo: Magnific