The government is encouraging businesses to contribute to the building of a resilient economy amid geopolitical challenges and a looming recession, asking them to work together to negotiate free trade agreements like the one with the European Union and a flagship initiative linking together a number of free trade agreements in the region.

The world is currently experiencing an economic slowdown, Foreign Minister Retno LP Marsudi told members of the Indonesian Chamber of Commerce and Industry (Kadin) at a coordination meeting in Jakarta on Tuesday, citing an International Monetary Fund forecast that places global economic growth at a meager 3.2 percent this year.

The IMF has also projected that around 90 percent of all countries including Indonesia will experience slower growth — in its 2019 World Economic Outlook published in October, the world monetary body slashed predictions of Indonesia’s rate of gross domestic product expansion to just 5 percent, down 0.2 percentage points from an earlier forecast in April.

Observers have singled out the protracted trade war between the United States and China as one of the biggest contributing factors of the global economic slowdown, and Retno said the government must work hard to benefit from the fallout, with businesses playing a significant supporting role.

According to Japanese investment bank Nomura, Indonesia was not considered a first-choice destination for companies looking to relocate their production facilities when the trade war first erupted, and President Joko “Jokowi” Widodo repeatedly expressed his concern on the matter.

“The world we face is not going to be easy. We hope that you can work together with the government to make Indonesia’s resilient economy stronger, so that we will be able to survive,” Retno told business leaders.

The minister said she was not going to allow Indonesia to remain a big market from which other countries benefit, and instead would use the country’s market size and large population as leverage in negotiating trade agreements, “so when we negotiate, we get win-win results”.

Jokowi has asked his Cabinet to deliver increased exports and investments for his second term, further cementing economic diplomacy as the Foreign Ministry’s number one priority.

As a result, reducing trade barriers through agreements such as the Regional Comprehensive Economic Partnership (RCEP) and the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA), have moved up the list of priorities in spite of the complications.

The RCEP negotiating text was finalized at a region-wide summit earlier this month, with a view to having its 15 participating countries sign the ambitious deal next year in Vietnam.

India, which held reservations on several provisions in the draft agreement, pulled out at the last minute but indicated it could still rejoin the endeavor if its demands were met.

Even without India, the RCEP bloc would amount to almost a third of the world’s total GDP, although in terms of market size a deal without India would account for just under 30 percent of the global population, compared with nearly half if India had remained in the fray.

“This is the challenge, and we can’t be taken hostage; it’s been more than seven years of talks. All of the negotiators want to get as much as possible [out of the deal] but it’s impossible to get everything,” Retno said.

She also underlined the “asterisk on palm oil”, which has put a strain on the already tenuous relationship between Jakarta and Brussels despite the former’s target to conclude negotiations on the IEU-CEPA by next year.

The EU announced in March a plan to completely phase out imports of palm oil, the world’s most ubiquitous and economical vegetable oil, by 2030. The bloc considers palm oil a high-risk commodity because of alleged impact on deforestation, while for Indonesia it is a staple good that helps support the livelihood of millions of people, particularly smallholder farmers.

Commenting on the IEU-CEPA, Kadin vice chairwoman for international relations Shinta Kamdani said that negotiations should go on in spite of disagreements on the palm oil issue.

On the one hand, the deal would provide benefits to Indonesia’s labor-intensive sectors like textiles and footwear, which have so far been unable to compete with countries like Vietnam. At the same time, however, Shinta warned the government to be careful about palm oil, and said the issue was not likely to be resolved in the short term.

“This is indeed a very complicated problem that [...] will be discussed in the [CEPA’s] special chapter on sustainable development,” Shinta said on Tuesday.

“There are two sides of the story but also a tug of war, but whatever the case we have to continue negotiating this deal as it will take time, and if we stop we will lose out to Vietnam.”