EU/Indonesia: towards a trade pact in 2023?
Despite several trade disputes, Brussels and Jakarta would like to conclude a free trade agreement by the end of the year.
On the margins of the G20 summit held in Bali in November 2022, the European Union and Indonesia decided to resume discussions, which began in 2016, to reach a trade agreement. On the menu: four rounds of negotiations are planned this year with the aim of reaching a pact by the end of 2023.
At present, progress has been made in trade in goods, rules of origin, customs procedures, trade facilitation and trade barriers.
But several points of divergence still remain to be resolved... Some European measures to protect the environment displease Jakarta, notably theDirective to ban imports responsible for deforestation from Community territoryThis text may affect several Indonesian products such as rubber, wood, furniture or palm oil.
In addition, under the Red II Directive*Brussels has imposed restrictions on the use of palm oil-based biofuels. Indonesia and Malaysia, which filed an appeal with the WTO (World Trade Organization), are still awaiting the decision to be taken in the course of 2022.
For its part, the European Union had lodged a complaint with the WTO againstJakarta embargo on exports of nickel oreused for electric batteries and stainless steel. By the end of 2022, the Organisation had decided in favour of Brussels.
In 2021, trade in goods between the EU and Indonesia amounted to EUR 24.7 billion. Indonesia is the world's fourth most populous country, the largest economy in Southeast Asia and the eighth largest in the world. It is also the first nickel-producing country with 800,000 tonnes in 2019, or 30% of world production.
* theRenewable Energy Directive IIis the main EU instrument for promoting energy from renewable sources.
Source(s): The Echoes