As Indonesia secures a major tariff reduction from 32% to 19% on exports to the US, a controversial clause has emerged: the transfer of Indonesian citizens’ personal data to American entities. President Prabowo Subianto confirmed ongoing negotiations, while officials scramble to clarify safeguards. Here’s what the deal entails—and why it matters beyond trade.
The Data-for-Tariffs Bargain
Buried in the 8-point White House agreement released July 22, 2025, is Clause 5: “Removing Digital Trade Barriers.” It stipulates that Indonesia will recognize the US as a jurisdiction with “adequate data protection” under Indonesian law, enabling cross-border data flows.
Key Details:
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Scope: Covers commercial data (e-commerce purchases, cloud storage, social media) but excludes mass surveillance.
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Legal Basis: Operates under Indonesia’s 2022 Personal Data Protection Law (PDP Law) and 2019 Electronic Transactions Regulation.
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Precedents: Similar to EU-US Data Privacy Framework, but with unresolved enforcement gaps.
Officials’ Contradictory Assurances
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President Prabowo: “Negotiations are ongoing,” offering no specifics when pressed at Jakarta’s JCC (July 23).
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Economy Minister Airlangga Hartarto: Claims the deal is finalized, emphasizing “responsible transfer to responsible nations.” Yet, he provided no technical safeguards.
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Digital Minister Meutya Hafid: Insists data flows will be “lawful, limited, and monitored,” citing uses like:
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Verifying purchasers of dual-use chemicals (e.g., palm glycerin for bombs/fertilizers).
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Regulating US tech giants (Google, Meta, AWS) operating in Indonesia.
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Red Flag: The agreement remains unfinalized, with critical oversight mechanisms still undefined.
The Global Context
Indonesia joins G7 nations in cross-border data schemes but faces unique risks:
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Asymmetry: US firms (e.g., TikTok, Microsoft) hold vastly more Indonesian user data than vice versa.
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Enforcement Doubts: The PDP Law lacks stringent penalties for foreign breaches—unlike the EU’s GDPR.
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Precedent: China’s 2021 data localization law shows alternatives, but Indonesia chose compromise.
What’s Unsaid—And Urgent
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No “Adequate Protection” Guarantee: The US lacks a federal privacy law. Enforcement relies on patchy state laws (e.g., California’s CCPA).
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Commercial vs. Government Access: While the deal targets business data, the NSA’s PRISM program looms as a backdoor risk.
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Public Backlash Potential: 73% of Indonesians distrust foreign data handling (2024 Ipsos survey).
The Bottom Line
This isn’t a data “surrender,” but a high-stakes gamble. For Indonesians, it means:
– Potential Gains: Cheaper exports, smoother digital services.
– Real Risks: Weaker recourse against US data misuse compared to EU citizens.
Officials’ Quote to Remember:
“Data flows are inevitable, but sovereignty is non-negotiable.” —Digital Minister Meutya Hafid
Why Bali Today Readers Should Care
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Expats/Tourists: Your Indonesian banking/visa data may fall under this framework.
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Businesses: Stricter compliance coming for US-Indonesia digital services.
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Privacy Advocates: A test case for Global South data sovereignty.
