Indonesia and โthe european Union Formalize Extensive Trade Agreement
Jakarta, Indonesia โข – Indonesia and the European Unionโ signed โขa long-awaited Comprehensive Economic Partnership Agreementโข (CEPA) on Tuesday, marking the culminationโข of a decade of negotiations aimed at bolstering trade and economic cooperation. The deal โฃarrives amidโค globalโ economic uncertainties fueled โbyโค “tariff wars โฃand protectionism” between major countries, prompting both sides to seek โคstability through a bilateral framework,โ according to Indonesian Chief Economic Minister Airlangga.
Theโข CEPA is expected to eliminate tariffs on approximately 80 percent of Indonesianโข exports to the โขEU, benefiting key sectors including โpalm oil, footwear, textiles, and fisheries. Bilateral trade between Indonesia and theโค EU โreached $30.1 billion in 2023, making the EU Indonesia’s fifth-largest trading partner. The agreement will also open EU access to โฃIndonesia’s market of around 280 million consumers.
Negotiations were partiallyโค spurred by the impact of former U.S. President Donald Trump’s tariff policies, asโค Indonesia sought option โคmarkets, and theโข EU โฃlooked to expand its reach in Asia. “This signing cameโข at the right momentโฆwe need to seek an alternative market in Europe, and Europe has the sameโค interest, they need a market to penetrate,” explained Bhima Yudhistira Adhinegara, executive director of the Center of economic and Law Studies.
The agreement’s signing follows a period of strained relations, particularly concerning the EU’s proposed deforestation regulation, which would restrict imports of goods linked to deforestation. Airlangga stated that EU Vice President Maroลก ล efฤoviฤ pledged “special treatment” regarding the regulation for countries with trade agreements with the bloc. The EU hasโฃ since postponed the regulation’s full implementation to the end ofโ 2024 following criticism.
However, the CEPAโข has drawn concern from environmental activists. โขGreenpeace Indonesia’s Syahrulโฃ Fitra warned that increased demand for Indonesian palm oil could accelerate deforestation, stating, “The remaining natural forests in palm โขoil concessions will potentially be cleared in the near futureโฆandโข converted into plantations.” While Brussels reportedly sought to include deforestation provisions in the agreement, details โremain undisclosed.
Following the signing, the CEPA โขwill undergo legal reviews, โขtranslations, and ratification processesโฃ by EU member states, theโ European Parliament, and indonesian lawmakers.Full implementation is anticipated by 2027.โค Airlangga described the agreement โฃas “a milestone that reflects our commitment and the commitment ofโค stakeholders to an open, fair, and enduring โขeconomic assistance.”