Trade Minister Targets Trade Negotiations With Europe And Eurasia To Be Completed This Year

JAKARTA - Trade Minister Budi Santoso is targeting the Indonesia-European Union Comprehensive Economic Partnership Agreement (Indonesia-EU CEPA) and the Indonesia-Ereraian Economic Union Free Trade Area (I-EAEU FTA) negotiations to be fully completed this year.

Budi said the trade negotiations with the two countries had shown rapid progress. This cooperation is expected to be implemented directly to open market access to Europe and also to Eurasia.

"We are targeting the two agreements to be completed this year. The Ministry of Trade, which is the lead in this negotiation, will ensure the completion of the negotiations so that the benefits can be felt by business actors and the public in general," he said in an official statement, Tuesday, June 10.

Budi also revealed that Indonesia-EU CEPA and Indonesia-EAEU FTA will give Indonesia a competitive advantage over other countries and pave the way for better economic growth.

Through Indonesia-EU CEPA and Indonesia-EAEU FTA, continued Budi, the market access for Indonesia's superior products with large markets to the EU region and the Eurasian Economic Union will increase.

"The two agreements also have the potential to diversify Indonesia's export market and become an alternative for products affected by the United States tariff policy," he said.

Budi also revealed that the two agreements will focus on labor-intensive manufacturing, agriculture, and fishery products.

"Indonesia-EU CEPA and Indonesia-EAEU FTA will reduce tariff and non-tariff barriers for a number of Indonesian export products, such as palm oil, agricultural products, textiles, and electronics so that they can compete more," he explained.

According to Budi, Indonesia-EU CEPA and Indonesia-EAEU FTA will open market access for Indonesia's superior products to a combined population of more than 600 million people with relatively high purchasing power. The European Union consists of 27 countries with nearly 450 million people, while the Eurasian Economic Union has 5 member states with a population of 183 million people.

Budi said the two agreements were comprehensive and inclusive. The issues include investment, micro, small and medium enterprises (MSMEs), and sustainability. He also hopes that investment in Indonesia in the industrial sector with advanced technology will increase through the two agreements.

Furthermore, Budi said that investment will contribute significantly to the competitiveness, development of technology in the domestic industry, downstreaming, and increasing the added value of Indonesian export products.

The two agreements can also support the export of Indonesian MSMEs in the priority program of the Indonesian Ministry of Trade, namely MSMEs Dare to Innovation, Ready to Adapt (BISA) Exports. The Indonesian Ministry of Trade through trade representatives abroad will provide direct assistance to MSMEs to penetrate the international market," said Budi.

Meanwhile, the Director General of International Trade Negotiations at the Indonesian Ministry of Trade, Djatmiko Bris Witjaksono, said that cooperation with the European Union and the Eurasian Economic Union was designed to support each other with a number of complementary elements.

For example, an agreement with the European Union is one aspect of ensuring a balance of environmental protection policies with trade activities.

"We hope that these two agreements can improve welfare, create new jobs, promote sustainable development, and attract investment in various sectors," said Djatmiko.

In 2024, Indonesia's total trade with the European Union reached 30.1 billion US dollars. Indonesia's exports to the European Union were recorded at 17.3 billion US dollars, an increase of 4.01 percent from the previous year.

Meanwhile, Indonesia's imports from the European Union amounted to 12.8 billion US dollars, down 9.1 percent from the previous year. Indonesia recorded a surplus against the European Union of 4.5 billion US dollars.

Meanwhile, in the same year, Indonesia's trade with the Eurasian Economic Union was recorded at 4.1 billion US dollars.

Indonesia's exports to the Eurasian Economic Union were recorded at 1.5 billion US dollars, up 36 percent from the previous year.

Meanwhile, Indonesia's imports from the Eurasian Economic Union were recorded at USD 2.4 billion, down 4 percent from the previous year. Indonesia has a deficit of the Eurasian Economic Union of USD 1.1 billion.

"We also hope that increasing market access to the Eurasian Economic Union can reduce the deficit and benefit Indonesia's trade balance. All parties can contribute to improving Indonesia's economic relations with the European Union and the Eurasian Economic Union through exports and investments," said Djatmiko.