Local Content Requirements: Assessment from Investment Law
Local content requirement (LCR) is one of several economic instruments used by governments for various purposes, including to protect infant domestic industries or to generate employment. Indonesia uses LCR policies in several sectors. However, LCRs are often found to be inconsistent with a country’s WTO commitments. Additionally, free trade agreements could also have provisions that regulate the implementation of LCRs. This paper seeks to assess whether Indonesia’s free trade agreements have provisions on LCRs, and, if so, whether its LCR regulations are consistent with those provisions.