Indonesia, EU Agree To Talks On Trade Treaty

Following positive recommendations from a study group established by the Indonesian government, it has been announced that the European Union (EU) and Indonesia have agreed to begin negotiations on a bilateral free trade agreement (FTA).

Indonesia has had a partnership and cooperation agreement with the EU since 2009, but discussions on an FTA had awaited the deliberations of a joint "vision group", set up by business, government and academics in late 2010 to present concrete recommendations on ways to enhance EU-Indonesia trade and investment ties.

Following a meeting organized by the study group to present its recommendations, the Indonesian government has now agreed to progress to immediate talks on a comprehensive economic partnership agreement (CEPA) with the EU, in order to liberalize trade in goods and services and promote investment. It was reported that the CEPA could cover 95% of current trade values, and reduce 95% of tariffs, between Indonesia and the EU.

It is felt that Indonesia could not afford to be left behind as the EU pursues negotiations towards FTAs with the individual ten countries within the Association of Southeast Asian Nations, following the suspension, in 2009, of talks on a region-to-region FTA. The EU is presently negotiating trade agreements with Singapore and Malaysia, while talks with Vietnam, the Philippines and Thailand are also under consideration.

June 16, 2011

Source: tax-news.com