Following the signing of the two treaties by respective foreign and defense minister in Bali on 27 June 2007, the Commission I of Indonesian House of Representative (overseeing defense and foreign affairs) was quick to renounce ratification of Defense Cooperation Agreement (DCA) with Singapore, since it is considered disadvantageous to Indonesia. They pointed out that the use of an area in Indonesia for a joint exercise that would involve a third party would threatening Indonesian sovereignty. This thesis seeks to analyze the political context in Indonesia that led to the government's decision to put the agreement on hold, by explaining first, the process of Indonesia’s foreign policy making and its interactions with democratization process on the postSoeharto era. Second, the role of domestic political forces in the parliament which shaping Indonesia's foreign policy on the DCA. The thesis concludes by providing lessons in respect of the Indonesian government’s challenges to formulate foreign policy under current democratization era. The research finds that DCA has not been ratify, because there was a difference on what has been define as National Interest between Indonesian government and the Parliament, where the Government prioritized beneficial cooperation, and the Parliament prioritized the sovereignty principle.

Keywords: sovereignty, foreign policy decision making, national interest, and diplomacy