Constraints to Indonesian Government in International Trade: a Trade Law Perspective

Abstract

International Trade Treaty (hereinafter referred to as ITT) as regulated in Indonesia by Law No. 7 of 2014 on Trade (hereinafter referred to as the Trade Law), especially Chapter XII, Article 84 paragraph (1), (2), and (3) letter (a), requires the approval of the Indonesian House of Representatives. However, ITT may not be ratified by legislation due to the substance of the ITT that does not meet the criteria set forth in Article 11 (2) of 1945 Constitution (hereinafter referred to as “Constitution”) as well as Article 10 of Law No. 24 of 2000 on Treaties (hereinafter referred to “Treaty Law”). This paper will review the ITT with regard to State responsibility under international law and relevant national laws such as Article 4 (1) of the Constitution that specifies the power of government, the Trade Law, especially Chapters XII, and the Treaty Law. If the House decides to reject the ratification of the ITT under consideration of clandestine political and economic interests, the consequence that needs to be considered is that the government is most likely violating the international responsibility. Moreover, international trade relation will ruin. Other states will distrust the political will of the Government when it comes to sign the ITT. Since the President and the House of Representatives hold international responsibilities under international customary law and the 1969 Vienna Convention, Article 26, pacta sunt servanda. Distruction of international trade relation will impact on national economic. This paper will specifically examine the separation of powers between the President and the legislative with regard to the conclusion of international trade agreements that were considered not in accordance with and in contradiction to the national law of the Republic of Indonesia and international law. The research applies normative and empherical methodology to review the Trade Law.

Keywords: International trade cooperation, international trade agreements, and treaty ratification.