Brussels, 18/07/2016 (Agence Europe) - On Monday 18 July, the European Commission and Indonesian government announced the launch of negotiations for a free trade agreement between the EU and Indonesia, following the go-ahead given that day by the Council of Ministers of the EU to launch these negotiations.
In a press release that followed the adoption, without discussions, of the decision by the Agriculture Council approving the launch of EU/Indonesia free-trade negotiations, the Council stated "The negotiations will be led by the Commission behalf of the EU, in consultation with the Council's Trade Policy Committee. The Council encouraged it to take an ambitious approach".
The Commissioner for Trade, Cecilia Malmström, and the Indonesian Trade Minister, Tom Lembong, immediately made a joint announcement of the launch of these negotiations "based on intense preparatory work in the last couple of months" by their respective services.
In the press release, they explained "The EU and Indonesia represent a huge market of 750 million consumers. These negotiations are the key to unleashing synergies between our economies. Our trade relationship has enormous untapped potential... The Agreement holds a promise of new great opportunities for businesses and people in our countries. That is why we engage today with a firm resolve to make these talks succeed".
Both sides agreed to negotiate an ambitious agreement that facilitates trade and investments and covers a broad range of issues, including customs duties and other barriers to trade, services and investment, access to public procurement markets, as well as competition rules and protection of intellectual property rights. The agreement will also include a "comprehensive chapter" on sustainable development, environmental protection and social development.
The first round of the negotiations will take place later this year.
Boosting annual trade by €25 billion. Trade in goods between the EU and Indonesia amounted to over €25 billion in 2015 with EU exports worth almost €10 billion and EU imports from Indonesia worth more than €15 billion, resulting in over €5 billion trade surplus for Indonesia.
The EU is Indonesia's fourth largest trading partner. Indonesia's key exports to the EU include agricultural products, which amounted to €4.3 billion in 2015. Other products exported by Indonesia are machinery and appliances, textiles and footwear, plastic and rubber products.
Indonesia is the EU's fifth largest trading partner in South-East Asia but ranks only 30th in the general EU trade ranking. The EU exports mostly industrial products to Indonesia, including machinery and appliances, transport equipment and chemical products.
Total bilateral trade in services between the EU and Indonesia amounted to €6 billion in 2014, with a surplus of €2.2 billion for the EU. The EU has a foreign direct investment stock in the country of nearly €26 billion, second only to Singapore.
Indonesia also benefits from the EU's Generalised Scheme of Preferences (GSP).
Indonesia will become the seventh country of the Association of South East Asian Nations (ASEAN) involved in the trade negotiation process with the EU, following Singapore and Vietnam (free trade agreements concluded), Malaysia and Thailand (talks pending), the Philippines (currently engaged in talks) and Burma/Myanmar (ongoing negotiations for an investment agreement).
Negotiations for a free trade agreement between the EU and ASEAN, launched in 2007 but frozen since December 2009, remain the "ultimate objective", according to the assurances provided by the Commission. These will be based on the free trade agreements concluded since then between the EU and ASEAN countries on an individual basis.
Bilateral relations between the EU and Indonesia are now governed by a partnership and cooperation agreement that entered into force on 1 May 2014 (EUROPE 11071). (Original version in French by Emmanuel Hagry)