Tag: EU

Euro-Indonesian Trade

indonesia marketIndonesia sees the benefits of improving its trade relations with Europe through the establishment of the Indonesia-European Union (EU) Comprehensive Economic Partnership Agreement (CEPA). By being a part of this, Trade Minister for Indonesia Thomas Lembong believes it will lead to “modernization” of current trade regulations in Indonesia and it has thus become “the current top priority” of the government. Hopefully an agreement between Indonesia and the EU will be reached by late 2017. Following that the next move will be becoming a member of the Trans-Pacific Partnership as well as the European Free Trade Association (TPP and EFTA).

Given that Indonesia is the largest economy in the Southeast Asia region, if this CEPA membership goes ahead, it will not only strengthen its investment climate, but this will have a trickle down affect into the entire region. By emancipating government appropriation and diminishing trade barriers, various major commodities will be given “great potential.”

While there has already been free trade cooperation agreements between the EU and Indonesia since 2011 with Susilo Bambang Yudhoyono’s administration, the CEPA will further formalize these and lead to a relaxing of barriers, furthering trade between the regions. It has thus been decided that CEPA membership is a higher priority than the TPP once. Further, if trade commitment is not enhanced between the EU and Indonesia, this will negatively impact the competitive edge Indonesia has, making Malaysia and Vietnam more attractive options for FDI. As things stand, Vietnam already has free access to take part in the US and EU export markets.

So these official agreements have to be made, and soon, if Indonesia wants to remain a key player in East-West markets.

Enhancing Asian-Euro Relations

Olof-SkoogTomorrow, Milan will be hosting an Asia-Europe Meeting (ASEM) on “Responsible Partnership for Growth and Security.” According to Olof Skoog, European Union Ambassador to Indonesia, the discussions are set to be very useful since “they will help strengthen mutual understanding between European and Asian countries. The meeting’s partners also tend to increase. Croatia and Kazakhstan will likely join the event this year.”

The two regions are constantly working on enhancing relations. Indeed, just last month, a new position was created – that of European Union Ambassador to the Association of Southeast Asian Nations – stationed in Jakarta, to: “coordinate the EU’s expanding cooperation activities with ASEAN… represent the EU in all relevant negotiations, coordinate with EU Member States and enhance public diplomacy efforts in relation to EU support for ASEAN integration.”

However, there is still much work to be done. According to an EGS paper published in April of last year, “After two decades of cordial but shallow discussions and modest action on many topics, the EU and Japan have agreed to negotiate a deep economic partnership while trying to cooperate in many other issues under shared values and principles.” In addition, “ASEAN is still the most comprehensive and promising for Europe in terms of values, so the EU keeps supporting ASEAN’s development plans and has recently signed its Treaty of Amity and Cooperation. If ASEAN regains cohesion and strength, the EU may want to hold summits to advance beyond the current plan of action, and appoint special envoys and the like to consolidate South- East Asia as a model of cooperation in a broader Asia.”

Other issues keep arising too. One suggestion to tackle these, proposed by the EGS was: “European and Asian countries and regional organisations could globally excel in global multi-level linkages by creating unique synergies between info-communications and education technologies and services.”

There needs to be greater cooperation. Just last week ASEM parliamentarians “rejected the proposal to give he EU the status of a dialogue partner with the Association of Southeast Asian Nations (ASEAN).” But for sure, the ASEM, that has been in process now for a decade, is a great beginning that is gaining momentum each year.