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The relationship between the EU and Indonesia has deepened over recent years. Following successful exploratory discussions, negotiations for an EU-Indonesia Free Trade Agreement (FTA) were launched on 18 July 2016. Eleven rounds have been held so far.
The FTA aims at developing a key aspect of the overall relationship between the EU and Indonesia, which is framed by the Partnership and Cooperation Agreement. The agreement entered into force on 1 May 2014.
Indonesia is a member of the WTO since 1995 and benefits from trade preferences granted by the EU's Generalised Scheme of Preferences (GSP), under which about 30% of total imports from Indonesia enjoys lower duties.
- Indonesia is the largest economy in the Association of Southeast Asian Nations (ASEAN). It represents about 1/3 of the region's GDP and has the largest population (270 million inhabitants in 2020).
- Bilateral trade in goods between the EU and Indonesia amounted to €20.6 bn in 2020, with EU exports worth €7.2 bn and EU imports worth €13.3 bn.
- The EU is Indonesia's fifth largest trading partner while Indonesia is the 31th global trading partner for the EU and fifth EU partner in ASEAN in 2020.
- Bilateral trade in services between EU and Indonesia in 2019 amounted to €7.5 bn in 2019, with EU exports amounting for €5.3 bn and imports amounting to €2.2 bn.
The EU and Indonesia
Over many years, relations have been framed by the EC Cooperation Agreement with the Association of South East Asian Nations (ASEAN), which was formalised in 1980. On this basis, economic and political discussions have been held regularly. Bilateral dialogues between the EU and Indonesia have included periodic reviews of political, economic and co-operation issues in Senior Official Meetings.
A Framework Agreement on Comprehensive Partnership and Co-operation was signed on 9 November 2009 and entered into force on 1 May 2014. The Agreement provides the basis for holding regular political dialogue and sectoral cooperation and takes bilateral relations to a higher level. The Agreement provides the legal framework to engage and cooperate across a wide spectrum of policy fields, including human rights, political dialogue, and trade.
Following successful exploratory discussions to further deepen EU-Indonesia trade and investment relations, negotiations for an EU-Indonesia FTA were launched on 18 July 2016. The ambition is to conclude a FTA that facilitates trade and investments and covers a broad range of issues, including tariffs, non-tariff barriers to trade, trade in services and investment, trade aspects of public procurement, competition rules, intellectual property rights as well as sustainable development.
A Sustainability Impact Assessment (SIA) in support of FTA negotiations between the EU and Indonesia was launched in 2018 and concluded in 2020. The SIA assessed how trade and trade-related provisions in the proposed FTA could potentially impact economic, social, human rights and environmental elements in each trading partner and in other relevant countries.
The final report and the Commission position paper can be found on the dedicated Sustainability Impact Assessments page.
Indonesia in ASEAN
Indonesia is one of the 10 members of the Association of South East Asian Nations (ASEAN), the largest economy in the region in terms of GDP (35%) and the EU’s 5th largest trading partner in ASEAN. It is also one of the fastest growing economies in South East Asia (average GDP growth of approximately 6% in the past 10 years).
Trading with Indonesia
- Importing into the EU from Indonesia
- EU trade defence measures on imports from Indonesia
- Exporting from the EU to Indonesia
- Trade relations are part of the EU's overall political and economic relations with Indonesia
- Indonesia is a member of the World Trade Organization
Today, the Commission has launched a consultation on the possible use of the Enforcement Regulation in its dispute settlement case on Indonesian nickel export restrictions.
The European Commission has extended the anti-dumping measures on imports of stainless steel hot-rolled coils (‘SSHR’) from Indonesia to imports of SSHR from Türkiye.
Today, the European Commission imposed anti-dumping duties on fatty acid from Indonesia. This follows an investigation which showed that EU industry was being harmed by dumped imports because it could not compete on price, resulting in a market share loss.