Let's not fall into same trap as Malaysia, warns Indonesian business lobby as Jakarta resists 'poison' deal with US

A powerful Indonesian business lobby has warned its government against "falling into the same trap as Malaysia" as Washington's hopes of pressuring Jakarta to sign a trade deal similar to the one signed by Prime Minister Anwar Ibrahim in October appear to have collapsed.

The warning from the Indonesian Employers Association – known by its acronym Apindo, the official body representing private and state-owned businesses in the country – comes as pressure mounts on Anwar not to ratify the Malaysia-US Agreement on Reciprocal Trade (ART), which he signed with Trump in what experts described as an unprecedented move that has undermined Malaysia's trade independence due to the agreement's overwhelming bias towards Washington.

"Malaysia has fallen into a trap. We at Apindo have urged the government to simply focus on bilateral trade and investment in the negotiations. From the very beginning, the reciprocal tariffs stemmed from [US] deficits," said prominent entrepreneur and Apindo spokesperson Anne Patricia this week, as reported by the Jakarta Globe.

Amid growing protests that the Anwar government continues to ignore, Indonesian officials have strongly resisted agreeing to some commitments insisted upon by the US during negotiations.

Last month, the Financial Times reported that Jakarta rejected a “poison pill” clause, which states that Washington could revoke its trade agreement and restore punitive trade tariffs if Indonesia signs any deal that compromises US interests.

It is the same clause that Anwar has signed and defended in the face of condemnations and an almost unanimous view among politicians, legal experts and economists that he has compromised Malaysia's sovereignty.

Anwar was subjected to public ridicule from the moment he danced alongside Trump during an elaborate welcome ceremony for the US president at the KLIA airport tarmac on Oct 26.

Hours later, Malaysia's social media exploded with memes of the US president gifting Anwar a White House pen shortly after signing the ART agreement on the sidelines of the Asean Summit.

But it was the details of the agreement, published on the White House website hours later, that sparked more serious public condemnation.

'Dont get caught in handshake traps'

At the heart of the outrage is a provision that obliges Malaysia to become a direct participant in US economic conflicts.

It states that if Washington imposes sanctions or tariffs on any third country for national security reasons, Malaysia "shall adopt or maintain a measure with equivalent restrictive effect", effectively ending Malaysia’s long-held foreign policy of non-alignment and mirroring US sanctions against other nations.

Prominent Malaysians from opposing sides have warned Anwar not to ratify the deal, with hundreds of police reports and threats of legal action against the prime minister, accusing him of economic sabotage and undermining the country's sovereignty.

Critics include economists, former top leaders of the Malaysian Armed Forces, and a former attorney-general.

"I believe that the action was taken without fully considering the national interest and, in my opinion, can be considered an act by someone who disregards the sovereignty of Malaysia as a sovereign country, and has the potential to drag the country into a situation where it is mortgaged to the influence of foreign powers," said former prime minister Dr Mahathir Mohamad in a police report on Dec 2.

On Dec 5, General Borhan Ahmad, who served as the country's 12th army chief, announced plans to bring the matter to the attention of the Conference of Rulers.

Earlier, former attorney-general Tommy Thomas launched a scathing attack on Anwar and all parties who agreed to the deal.

"The US handed them their draft. And it was signed lamely by Anwar, who had Trump’s pen to show for it, and a ride in Trump’s car," he said.

It is unlikely that President Prabowo Subianto, whom many believe was fortunate that the August unrest over economic inequalities did not spiral into a wider national movement to topple his government, would risk signing a lopsided deal for his country and be accused of undermining sovereignty.

“Sovereignty is not something that we can compromise," said Apindo.

"We must not get caught in handshake traps. This is about trade and investment. It has nothing to do with politics."