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Blog: EU and Indonesia talks move on

Met dank overgenomen van A.C. (Cecilia) Malmström, gepubliceerd op donderdag 26 januari 2017.

The trade dynamics of the world are changing rapidly. This week, US President Donald Trump announced that the US would not be joining the Trans-Pacific Partnership (TPP).

Given the changing international environment, I commented on the way forward for EU trade policy at a speech in Brussels this week - read it here. The EU is in different stages of negotiation on 20 different trade deals. We are negotiating or implementing trade agreements with all major TPP participants, including, for instance, Japan and Mexico.

It is clear that our Asian trade talks will be of particular importance in the year ahead. Looking beyond the participants of TPP, this week we have the first full round of negotiations with Indonesia - the largest market of Southeast Asia with a population of over 250 million.

The Indonesian market undoubtedly represents a huge business potential. The ambition is to conclude an economic agreement between the EU and Indonesia that makes trade and investment easier and covers a broad range of issues, including customs duties, regulatory barriers to trade, trade in services, trade aspects of public procurement, competition rules, intellectual property rights, investment and - last but not least - rules on sustainable development. Needless to say, this is a challenging negotiation, and we have a lot of work ahead of us before we would be able to conclude.

But the reasons for a deal are clear - with more than a third of the region's GDP, Indonesia is also the largest economy of the ASEAN countries. Already today, we trade goods worth over €25 billion a year between us. EU imports include, for example, agriculture and food products, technical appliances, textiles and shoes, as well as plastic and rubber materials. From the EU side, we supply Indonesia with various industrial products - machinery, cars, chemicals, and so on. Two thirds of these exports come from Germany, France and Italy, with many other EU countries also contributing.

The EU is the second largest investor in the country (after Singapore). The EU's foreign direct investment stock in Indonesia amounts to nearly €26 billion, so it's also worth getting better bilateral rules in place in that area.

After an initial two-day round in September of last year, our negotiators are entering into detailed discussions this week, addressing all topics to be included in the agreement. The aim is to present the EU's specific proposals for several chapters.

In order to shape a good deal, we need stakeholders to be involved and well-informed. A report from this week's round, as well as EU text proposals, will be published on our dedicated website shorty after our negotiating team comes back to Europe.

To make the most of our EU team's visit to Indonesia, we also have two side-events set up: Last Friday we held a dedicated workshop in Jakarta with our counterparts from the Indonesian government on investment protection policy, and the EU's proposal for an Investment Court System. Once this week's round is over, we will also hold our annual Working Group on Trade and Investment. It will be an occasion to solve some of the specific issues faced by EU companies already present on the Indonesian market.


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