The Indonesia 19% Trade Deal with the United States has sparked concern after it was revealed that the U.S. request includes a provision for cross-border data transfers. In exchange for reducing tariffs on certain Indonesian exports from 32% to 19%, the United States seeks to allow American companies to freely transfer personal data of Indonesian users to the U.S.
The White House stated, “Indonesia will provide certainty regarding the ability to transfer personal data out of its territory to the United States.” This commitment is part of a broader digital trade component within the agreement, which was released in a White House fact sheet titled “The United States and Indonesia Reach a Historic Trade Agreement” on July 23.
What’s Behind the Indonesia 19% Trade Deal?
The Indonesia 19% Trade Deal includes tariff reductions for a number of Indonesian commodities entering the U.S. market. This move is designed to promote stronger bilateral trade and digital cooperation. According to the White House, the deal also acknowledges U.S. data privacy standards, stating, “The management of personal data is justified because the United States is considered to have adequate data protection.”
Moreover, the White House emphasized, “American companies have pursued these reforms for years,” referring to efforts by U.S. tech firms to improve privacy protections domestically. However, the inclusion of data transfer terms in the trade agreement has drawn criticism from cybersecurity experts in Indonesia.
Read More: Luhut Backs US-Indonesia Trade Deal, ASEAN’s Lowest Tariffs
US Seeks Cross-Border Data Transfer Rights
As part of the agreement, U.S.-based companies would gain the legal right to transfer Indonesian user data to their home country. This cross-border data transfer request ties digital trade to the physical export of goods, creating a new digital precedent in U.S.-Indonesia relations.
Cybersecurity experts warn that this provision may benefit foreign corporations more than local stakeholders. By analyzing and storing user data abroad, American companies could gain significant economic advantages while Indonesia remains a mere data source without the infrastructure to harness its own digital assets.
Digital Sovereignty Risks for Indonesia
Pratama Persadha, Chairman of the Cyber Security Research Institute CISSReC, warned that the deal could undermine Indonesia’s control over its citizens’ data. He stated, “The data transfer agreement between Indonesia and the United States… marks a new chapter in the digital relations between the two countries.”
However, he cautioned that, “Behind the enthusiasm for economic cooperation and expanding digital trade, there are several potential consequences that could affect Indonesia’s digital sovereignty, the protection of citizens’ human rights, and national cybersecurity resilience.”
Once data leaves Indonesian jurisdiction, oversight becomes difficult. “After data flows to a country like the United States, which lacks a comprehensive federal data protection law, the government’s ability to ensure ethical and legal use of that data becomes very limited,” Pratama added.
He also warned of privacy risks: “This creates a high-risk oversight gap in terms of privacy, particularly when data becomes accessible to commercial entities or foreign security agencies.”
Trade-Offs in the Indonesia 19% Trade Deal
The economic value of data adds another layer to the controversy. “When this data is collected and analyzed abroad, foreign companies benefit significantly more than the country where the data originated,” Pratama explained.
He stressed that Indonesia could become dependent on foreign technologies: “Indonesia ends up merely supplying raw material, without the capacity to independently develop added value.”
There are also geopolitical implications. “If Indonesia appears too accommodating to U.S. requests for data transfer, countries like China or ASEAN members… might view Indonesia as siding with the Western digital bloc,” he said. This perception could strain regional cooperation, particularly in forums promoting digital neutrality.
Read More: Indonesia Export Tariffs Set at 19% in US Deal – Benefit or Burden?
Safeguarding Data in Global Trade Agreements
The inclusion of personal data transfer rights in the US-Indonesia 19% Trade Deal has drawn attention to the urgent need for robust legal frameworks.
Pratama concluded, “Without such a foundation, cross-border data transfers not only threaten digital sovereignty but also jeopardize the sustainability of Indonesia’s digital economy and its geopolitical position.”
So far, Indonesia’s Ministry of Communication and Digital has not responded to inquiries about the deal. As this agreement moves forward, experts urge the government to prioritize national interests and ensure strong protections for personal data.
Source: katadata.co.id
Image: Canva
