Indonesia’s new trade imperative is storytelling

Indonesia is increasingly focused on shaping public perception as it expands its network of economic partnership agreements, recognizing that domestic and international narratives are crucial for the endurance of these deals.

The Importance of Narrative in Economic Partnerships

To foster supportive domestic environments for these agreements, reciprocal perceptions are essential. Indonesia’s ambitions – including Comprehensive Economic Partnership Agreements (CEPAs) with the EU and Canada, its role within ASEAN and the Regional Comprehensive Economic Partnership, and its pursuit of OECD membership – signal a desire for greater influence in global value chains. However, integration now occurs within a highly politicized and digitally saturated landscape, rendering the traditional negotiation-benefit-acquiescence model obsolete.

Past trade agreements, such as the Trans-Pacific Partnership and the EU-US Transatlantic Trade and Investment Partnership, faltered not over tariffs but due to negative public narratives framing them as threats to sovereignty and employment.

Challenges with Indonesia-EU and Indonesia-Canada CEPAs

The Indonesia-EU CEPA faces similar challenges. While promising deeper trade and sustainability ties, it encounters political headwinds, particularly regarding European concerns about palm oil and deforestation, which Indonesia often views as protectionist barriers. Bridging this gap requires a narrative that positions Indonesia as a partner in building sustainable supply chains and Europe as a collaborator respecting Indonesia’s development.

The Indonesia–Canada CEPA similarly navigates complex issues, especially concerning critical minerals. Canada scrutinizes Indonesia’s extraction and labor practices, while Indonesia seeks policy space for downstream processing. A unifying narrative is needed to reconcile these positions and prevent the agreement from being undermined by opposing interests.

Lessons from the Indonesia-Australia CEPA

The IndonesiaAustralia CEPA highlights the importance of public understanding. Despite years of technical cooperation laying a strong foundation when the agreement came into force in 2021, public awareness remained limited. Polling revealed significant perception gaps, with fewer than half of Australians viewing Indonesia as a democracy and only a small share of Indonesians considering Australia their closest partner.

The Katalis initiative, designed to support the Australia–Indonesia agreement, prioritized narrative development from the outset. This shift involved translating cooperation into relatable stories, such as Indonesian students graduating from Australian-certified aged care programs, demonstrating tangible benefits and shared standards.

Katalis also showcased Indonesian SMEs entering Australian markets and Australian training providers expanding into Indonesia, consistently highlighting reciprocal opportunities and reframing the agreement as a platform for skills development, business growth, and resilience.

The Need for Strategic Storytelling

With Southeast Asia’s online population exceeding 460 million, economic diplomacy is now a contest for attention. Agreements framed solely in terms of GDP projections or tariff schedules can seem distant and elitist, creating a vacuum for misinformation regarding issues like foreign workers and environmental obligations.

Effective storytelling requires focusing on lived experiences – small businesses entering new supply chains, farmers accessing higher-value markets, and students gaining recognized qualifications – to humanize policy and foster inclusivity.

Partners in Europe and North America must update outdated perceptions of Indonesia as merely a commodity exporter, recognizing its status as a G20 economy with a growing tech sector and clear industrial policies. Conversely, Indonesia needs to portray Australia, Canada, and the EU as collaborators in industrial upgrading and shared prosperity.

Narrative gaps extend beyond commerce. The decline of Indonesian language studies in Australian universities during the IA-CEPA rollout served as a warning, highlighting the risk of purely transactional partnerships lacking cultural understanding.

Key Shifts for Future Success

To avoid past mistakes, narrative strategy must be integrated into economic diplomacy from the beginning. This requires three key shifts: integrating communications into the negotiation process, co-authoring sustainability narratives that reflect Indonesia’s agency, and centering storytelling on relatable, human-scale benefits.

Trade agreements are fundamentally political documents, and their success depends on citizens recognizing themselves in the opportunities they create. For Indonesia’s ambitious CEPA agenda, effective storytelling is as crucial as the technical work itself, ensuring a narrative that resonates both domestically and internationally.