Vol. VII / No. 3 | February 2026
Authors:
Rachmasari Nur Al-Husin –Doctoral Student and Junior Fellow at Global South Solidarity, Department of International Relations, Universitas Indonesia
Summary
Indonesia has prioritised trade diversification toward non-traditional partners within the framework of South–South cooperation. However, its trade diplomacy toward Latin America and Africa has developed unevenly. While comprehensive economic partnership agreements (CEPAs) have been concluded with Latin American partners, engagement with Africa remains largely confined to preferential trade agreements (PTAs), despite Africa’s stronger commodity complementarity and economic stability. This article argues that the divergence is driven less by economic fundamentals than by institutional comfort, political signalling, and policy learning effects. Latin America has served as a lower-risk environment for comprehensive trade engagement, while Africa remains primarily framed through development cooperation, limiting deeper trade integration. The article highlights the need to recalibrate Indonesia’s trade diplomacy toward Africa to achieve more coherent South-South engagement.
Keywords: Trade diplomacy, South-South cooperation, Non-traditional markets
Introduction
Indonesia’s foreign economic policy has increasingly emphasised diversifying trade partners beyond traditional markets in East Asia, Europe, and North America. Within this agenda, Latin America and Africa are often grouped as non-traditional partners under the broader banner of South–South cooperation. Both regions are frequently described as “untapped markets,” each accounting for less than five per cent of Indonesia’s total exports (Sabaruddin, 2016). However, Indonesia’s trade diplomacy toward these two regions has evolved along sharply different trajectories.
While Indonesia has concluded and expanded comprehensive economic partnership agreements (CEPAs) with Latin American partners, most notably Chile, Peru, and MERCOSUR, its engagement with Africa remains largely confined to preferential trade agreements (PTAs) (Kementerian Perdagangan Republik Indonesia, 2025). This divergence is puzzling. Africa offers stronger commodity complementarity with Indonesia, a growing consumer base, and comparatively stable post-pandemic economic growth. Latin America, by contrast, shares structural similarities with Indonesia’s export profile, often resulting in competitive rather than complementary trade relations.
This commentary argues that economic fundamentals do not primarily drive Indonesia’s deeper trade engagement with Latin America. Instead, it reflects a combination of institutional comfort, political signalling, and policy-learning effects that shape how Indonesia translates opportunities into binding trade commitments.
Economic Potential vs Policy Reality
From an economic standpoint, Africa appears to be the more promising partner for Indonesia’s trade expansion. Indonesia’s export structure, dominated by vegetable oils, paper products, light manufacturing, automotive components, and basic consumer goods, aligns closely with African import demand (UN Comtrade, 2025). Trade relations with Africa have also demonstrated relative resilience during periods of global economic disruption. During the COVID-19 pandemic (2020-2021), while Indonesia’s exports to several Latin American markets contracted sharply due to supply-chain disruptions and commodity price volatility, exports to key African partners such as South Africa, Egypt, and Nigeria rebounded more quickly in 2021, supported by sustained demand for palm oil, pharmaceuticals, and consumer goods (UN Comtrade, 2025). Similarly, during the post-pandemic commodity price correction in 2022–2023, Indonesia maintained trade surpluses with several African partners, indicating relatively stable demand structures compared to more volatile Latin American markets.
Latin America presents a different economic profile. Many Latin American economies, like Indonesia, remain heavily reliant on primary commodities and resource-based exports. This structural similarity limits broad-based complementarity and confines trade to specific niches such as footwear, electronics, and selected manufactured goods (Ramana & Retnosari, 2018). As a result, Indonesia’s export portfolio in Latin America does not fully reflect its overall comparative advantages.
Macroeconomic indicators further underscore this contrast. Although Latin America’s aggregate nominal Gross Domestic Product (GDP) remains larger, African economies have displayed more stable real GDP growth and, in recent years, higher purchasing power parity (PPP) levels (International Monetary Fund, 2025). These trends suggest that Africa offers not only market potential but also greater resilience to external shocks.
Despite these indicators, economic potential has not translated into policy depth. Indonesia’s trade agreements with Africa remain limited in scope, while Latin America has become the focal point for comprehensive frameworks. This disconnect points to factors beyond economic rationality shaping Indonesia’s trade diplomacy.
Institutional Comfort and Policy Learning in Latin America
Indonesia’s deeper engagement with Latin America is best understood through the lens of institutional familiarity and policy learning. The Indonesia-Chile Comprehensive Economic Partnership Agreement (IC-CEPA), formally signed in December 2017 and entering into force in August 2019, initially focused on trade in goods and was later expanded to include services and investment chapters. Since its implementation, IC-CEPA has functioned as a practical learning platform for Indonesian trade negotiators. The agreement offered a relatively manageable environment in which Indonesia could experiment with regulatory provisions, services liberalisation, and dispute settlement mechanisms (Kementerian Perdagangan Republik Indonesia, 2024).
Latin American partners also tend to possess regulatory structures and negotiation capacities that align more closely with Indonesia’s institutional preferences. This compatibility reduces transaction costs and implementation uncertainty, making comprehensive agreements appear less risky (Taufiqqurrachman & Handoyo, 2021). Over time, these experiences have generated a path-dependent logic. Once a CEPA framework proved workable in Latin America, extending similar arrangements to other countries in the region became both feasible and strategically attractive. For example, negotiation experiences from the IC-CEPA CEPA informed Indonesia’s subsequent engagement with Peru through the Indonesia-Peru CEPA (IP-CEPA), signed in 2018 and entering into force in 2021, as well as exploratory discussions with MERCOSUR. Regulatory templates, tariff-elimination schedules, and negotiation modalities developed in Chile were partially replicated in subsequent talks, illustrating how institutional learning generated incremental expansion within the same regional cluster.
Political signalling has further reinforced this trajectory. Deep trade agreements with Latin American partners allow Indonesia to project an image of openness, reform orientation, and commitment to high-standard trade governance. Such signalling strengthens Indonesia’s credibility not only in bilateral relations but also within wider global trade networks (Al-Husin & Virgianita, 2024). Latin America, in this sense, has become a relatively “safe arena” for Indonesia’s comprehensive trade diplomacy.
Africa: Strong Potential, Limited Policy Translation
Indonesia’s engagement with Africa has followed a markedly different path. Rather than being anchored in trade liberalisation, relations have historically emphasised political solidarity, development cooperation, and technical assistance (Suryanta & Patunru, 2023). Capacity-building programmes, infrastructure initiatives, and development forums dominate the bilateral agenda, reinforcing Africa’s position as a partner for cooperation rather than market integration.
While these initiatives strengthen diplomatic ties, they do not automatically translate into binding trade commitments. PTA concluded that African partners remain narrow in scope and lack the regulatory depth associated with CEPAs. Unlike comprehensive agreements, they do not substantially reshape market access, investment frameworks, or services trade.
Institutional fragmentation further complicates deeper engagement. Diverse regulatory regimes, uneven negotiation capacities, and implementation challenges increase the perceived risks of comprehensive agreements. Although the African Continental Free Trade Area (AfCFTA) offers a pathway toward market integration, Indonesia has yet to articulate a clear strategy for leveraging AfCFTA as a platform for deeper trade engagement (Asche, 2021).
Political symbolism also plays an ambivalent role. Africa occupies a central place in Indonesia’s diplomatic identity through the legacy of the Bandung Conference and South-South solidarity. However, this historical narrative often reinforces a development-oriented framing, inadvertently sidelining trade liberalisation as a policy priority (Heryadi, Darmastuti, & Rachman, 2024). As a result, Africa’s economic potential remains under-translated into Indonesia’s trade architecture.
Strategic Implications for Indonesia
Indonesia’s two-track approach to trade diplomacy carries important strategic implications (Tobing & Virgianita, 2020). Prioritising institutional comfort over economic opportunity risks underutilising Africa’s growing market potential, particularly as other emerging economies pursue deeper trade and investment frameworks on the continent. The continued separation between development cooperation and trade policy also limits coherence, reducing the effectiveness of Indonesia’s economic diplomacy.
To address this gap, Indonesia’s trade strategy would benefit from reframing Africa not merely as a development partner but as a trade-led opportunity. This requires integrating trade objectives into existing diplomatic platforms and aligning technical cooperation with longer-term market access goals. AfCFTA, in particular, offers a strategic entry point for phased and modular engagement that could gradually move beyond PTA-level commitments.
Equally important is strengthening institutional preparedness. Enhancing regulatory cooperation, negotiation capacity, and policy coordination would reduce perceived risks and enable Indonesia to pursue deeper agreements with greater confidence. Aligning the normative language of South-South solidarity with concrete trade objectives would also help ensure that political symbolism supports, rather than substitutes for, economic integration.
At the institutional level, coordination would need to be led primarily by the Ministry of Trade (Kemendag), particularly the Directorate General of International Trade Negotiations (Ditjen PPI), in close collaboration with the Ministry of Foreign Affairs (Kemlu), the Coordinating Ministry for Economic Affairs, and sectoral ministries such as Industry and Investment. Indonesian embassies in key African capitals would also play a crucial role in market intelligence and regulatory mapping. Stronger inter-ministerial coordination would reduce fragmentation and align development cooperation instruments with trade negotiation objectives.
Conclusion
Indonesia’s deeper trade diplomacy with Latin America reflects institutional familiarity, political signalling, and accumulated policy learning rather than superior economic fundamentals. Africa, despite offering stronger economic complementarity and greater stability, remains constrained by a development-oriented framing and institutional caution. Addressing this misalignment requires coordinated action among key stakeholders. The Ministry of Trade must lead negotiation recalibration, supported by the Ministry of Foreign Affairs in reframing Africa within Indonesia’s economic diplomacy narrative. The Coordinating Ministry for Economic Affairs should ensure cross-sectoral alignment, while Indonesian embassies and trade promotion centers must strengthen market intelligence. Engagement with private-sector actors, particularly exporters and industry associations, is equally critical to translate diplomatic intent into commercial outcomes. Without such stakeholder alignment, Indonesia’s South–South engagement risks remaining symbolic rather than structurally transformative.
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