Indonesia and the European Union have reached a trade deal that eliminates more than 98% of tariffs and creates new opportunities for investment and trade, reports The Wall Street Journal.
The agreement, which was negotiated for more than nine years, was signed during the visit of the European Commissioner for Trade and Economic Security Maros Šefčovych to Jakarta. According to him, it eliminates almost all trade barriers and opens new avenues for investment, and it is planned to be ratified by January 1, 2027.
Indonesian Economy Ministry spokesman Haryo Limanceto said the agreement is beneficial for labor-intensive sectors such as footwear, textiles, clothing, palm oil, fisheries, renewable energy and electric vehicles. Shefcovych added that the agreement provides a “balanced result” and provides for a gradual reduction of tariffs on imported cars, which will open opportunities for the export of European cars and investments in electric cars.
The agreement is expected to double bilateral trade within five years, as Indonesia will gain greater access to the EU-27 market. The EU is Indonesia’s fifth largest trading partner, with trade between the two sides exceeding 27 billion euros last year, the WSJ notes.
Meanwhile, Thailand, the Philippines and Malaysia are also in talks with the EU, while China and the Association of Southeast Asian Nations completed talks on renewing their trade deal earlier this year.
