UK Supports Indonesia’s OECD Bid: Breaking Down Trade Barriers for Faster Growth

The United Kingdom and Indonesia have launched a joint initiative to tackle trade barriers as Jakarta advances its bid for Organisation for Economic Co-operation and Development (OECD) membership, according to a statement from the UK Department for International Trade. The collaboration, first reported by the Jakarta Globe, focuses on aligning regulatory frameworks to ease cross-border commerce, with officials emphasizing the importance of “streamlining non-tariff measures” in a joint press release.

Indonesia’s application to the OECD, submitted in 2022, has faced scrutiny over its trade policies, particularly in sectors like agriculture and manufacturing. A UK trade official confirmed that discussions with Indonesian counterparts have prioritized reducing bureaucratic hurdles, citing “persistent challenges in customs procedures and product certification standards” as key obstacles. The official added that the UK aims to “leverage its experience in post-Brexit trade negotiations to support Indonesia’s reform agenda.”

Indonesian Trade Minister Zulkifli Hasan reiterated the country’s commitment to OECD requirements during a meeting with UK diplomats in Jakarta on March 15. He highlighted efforts to modernize the nation’s import licensing system and improve transparency in public procurement. “Our goal is to create a more predictable business environment that attracts foreign investment while protecting domestic industries,” Hasan said, according to a transcript shared by the Indonesian government.

The UK’s involvement aligns with its broader strategy to deepen economic ties with Southeast Asian nations. A 2023 trade report by the UK’s Office for National Statistics noted that bilateral trade between the two countries grew by 12% in 2022, reaching £4.7 billion. However, the report also identified “regulatory divergences” as a barrier to further growth, particularly in digital services and environmental product standards.

OECD accession requires candidate countries to adopt a range of market-opening measures, including reducing subsidies for state-owned enterprises and enhancing intellectual property protections. Indonesia’s current trade deficit with the UK, which stood at £840 million in 2022, has drawn attention from both governments. A UK-based trade analyst, speaking on condition of anonymity, suggested that “resolving these imbalances will be critical for Jakarta’s long-term membership prospects.”

Both nations have agreed to a series of technical workshops scheduled for April and May, focusing on harmonizing technical regulations and improving dispute resolution mechanisms. A joint statement from the UK and Indonesian embassies in each other’s capitals emphasized that “progress in these areas will be a key factor in assessing Indonesia’s readiness for OECD membership.”