Brussels/Denpasar (dpa -AFX) – Negotiations on a free trade agreement between the EU and the world’s largest island state of Indonesia have been completed after more than nine years. EU trade commissioner Maros Sefcovic and the Indonesian Minister of Economics Airlangga Hartarto signed an economic agreement on Bali and an investment protection agreement between the community of states and the Southeast Asian economic power.
This should almost fully abolish tariffs on EU goods in imports to Indonesia. This should apply, among other things, to cars and agricultural products. “We are experiencing a time of upheavals, uncertainty and rapid change,” said Sefcovic. “But with the current conclusion of this agreement, the EU and Indonesia send a strong signal: we stand for an open, regular -based and advantageous international trade for both sides.”
He was convinced that the deal would help “to open up enormous unused potential”. By abolishing over 98 percent of the tariffs, he brings numerous advantages for both sides. Minister Airlangga Hartarto spoke of an “important milestone”.
Europe has access to critical raw materials
Before signing, EU Commission President Ursula von der Leyen had said that the planned agreement was given the EU stable and reliable access to critical raw materials that were indispensable for Europe’s clean technologies and the steel industry. At the same time, she opens up new opportunities for companies and farmers in a large and growing economy.
As early as July, Leyen and Indonesia’s President Prabowo Subianto agreed on the conclusion of the negotiations that have been going on since 2016. The consideration of sustainability standards and investment calms were considered important EU issues.
EU wants to position itself broader
Against the background of geopolitical developments, the EU also strives to diversify its trade relationships more. The trade conflict with the United States, the raw material dependency of Russia and susceptible supply chains increase the pressure. After 25 years of negotiations with the Mercosur countries (Argentina, Brazil, Paraguay and Uruguay), Brussels recently achieved an agreement on a large free trade zone, modernized the free trade agreement with Mexico and is also looking for new ways in trade relationships with Great Britain.
Before the agreement can come into force with Indonesia, the Council of Member States and the European Parliament must agree.
With more than 280 million inhabitants, the G20 state of Indonesia is the third largest democracy and the most populous Muslim country in the world. The Southeast Asian community of Asean has been based in the capital of Jakarta since 1976. The island kingdom is considered the most powerful player in all of Southeast Asia and one of the most important countries in the entire Indopazacifik./RDZ/CFN/DP/ZB