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Indonesia eyes EU trade breakthrough as bloc softens green business rules
Indonesia has the opportunity to wrap up a long-delayed free trade deal with the European Union after the bloc officially placed Indonesia in its “standard-risk” deforestation law category, a step seen by businesses as a signal that could boost exports of palm oil, coffee, cacao and other commodities.
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A worker pushes a wheelbarrow carrying palm fruit bunches on Oct. 24, 2021, at a oil palm plantation in a protected area of the Rawa Singkil wildlife reserve, which is part of the Leuser Ecosystem in Trumon, South Aceh regency, Aceh. (AFP/Chaideer Mahyuddin)
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ndonesia has the opportunity to wrap up a long-delayed free trade deal with the European Union after the bloc officially placed Indonesia in its “standard-risk” deforestation law category, a step seen by businesses as a signal that could boost exports of palm oil, coffee, cacao and other commodities.
“Yes […] we’re in the middle of finalization, and the EU seems to be easing now as we near the final stage,” Trade Minister Budi Santoso said on Wednesday, confirming that Indonesia was not among the countries deemed high risk under the EU’s Deforestation Regulation (EUDR).
He noted that the EU’s move emerged during the final talks to conclude the Indonesia-EU Comprehensive Economic Partnership Agreement (I-EU CEPA), which was expected to be finalized by mid-year.
Negotiations on the trade pact began in 2016, but multiple deadlines to conclude them have been missed.
“A lot of changes are happening, including things like that,” he added.
Read also: EU eases deforestation law reporting for companies
Indonesia, the world’s largest palm oil producer, has raised concerns over EU law banning imports of commodities linked to deforestation after 2020, as well as requiring traceability and geolocation coordinates of commodities subject to the regulation, effective for large companies from the end of this year.
