Scholars have devoted little attention to foreign policy motive of Indonesia’s free trade agreement (FTA) policy. This article finds that, under competitive international pressure, Indonesia has instrumentalised some FTAs to serve its “Association of Southeast Asian Nations (ASEAN)-first” foreign policy, specifically to ensure the geopolitical and geoeconomic relevance of ASEAN. Three FTAs display this motive: the ASEAN Free Trade Area, later extended to the ASEAN Economic Community, the ASEAN–China FTA, and the Regional Comprehensive Economic Partnership. Domestically, the pro-ASEAN group has supported this motive against other influential domestic actors, especially the nationalist and the pro-liberalisation groups. However, diffused political authority has led to an inconsistent FTA policy across various trade policymaking phases. The “pro-ASEAN” FTA policy has been relatively stronger in both the negotiation and ratification, but substantially weaker in the implementation phases.

This paper discusses determining factors behind Indonesia’s deindustrialization in the post-New Order era. Over time, manufacturing sector shows decreasing contribution to Indonesia’s GDP, while industrial transformation stagnates with limited high-technology exports. Using Linda Weiss’ (1998) Governed Interdependence and Christopher Dent’s (2003) Adaptive Partnership theories, this paper offers political-economy arguments to explain the phenomenon. Internationally speaking, while it is true that neoliberal globalization imposes some restrictions, it is too much to claim the death of industrial policy. Rather, it is the limitation of domestic institutions that is best explained Indonesia’s case. Using automotive, rattan and copper industries as case studies, the argument consists of two parts. First, in post-New Order Indonesia there is insufficient coordination between state and capital (both foreign and domestic). Second, the state in Indonesia lacks sufficient administrative capacity. The paper recommends Indonesia to invest in domestic institution as a means to reindustrialize.

From 2003 to March 2018, Malaysia showed increasing enthusiasm toward forging free trade agreements (FTAs). This article analyzes the factors that determined its attitude, focusing on: (i) why it is currently active; (ii) why it selects specific partners; and (iii) why it combines moderate with comprehensive liberalization. It is found that the interplay between ideas, institutions, and interests are important to explain the causes. First, both state interventionism and neoliberal ideas influence these outcomes. Second, within the competitive authoritarian institutions, neoliberal supporters have benefited from executive‐heavy policymaking processes, while the anti‐FTA groups failed to forge a strong alliance. Third, interaction between two veto points – the neoliberal executive and the resistant faction within the ruling party – created compromise and convergence in FTA policy. Ultimately, Malaysia has an “assertive but reserved” attitude toward reconciling differences between old embeddedness and new international practices.