Perspectives

European Union (EU) and Indonesia cooperation has deepened over the years. Diplomatic ties between the two parties were initiated with the establishment of cooperation between EU and ASEAN in 1980. This gave rise to the first Partnership and Cooperation Agreement (PCA) between the EU and an ASEAN Member State.

The PCA came into force in May 2014. Two years later, in July 2016, the two partners launched negotiations to establish a Comprehensive Economic Partnership Agreement (CEPA) that will strengthen economic ties, boost overall trade and investment and create sustainable mutual prosperity.  

All along the journey, the EU has been a strong and committed development partner for Indonesia, supporting the development policies through several thematic programmes. One of the flagship initiatives under the EU-Indonesia cooperation framework is the ARISE+ Indonesia – Trade Support Facility. With an overall budget of €15 million, the programme aims to enhance Indonesia's capacity to boost the trade performance and competitiveness.

On 15 October 2021, we had the honour to have a virtual discussion with H.E. Vincent Piket, the EU Ambassador to Indonesia and Brunei Darussalam. He kindly shared his perspectives and insights on the strong partnership of the EU and Indonesia that will support Indonesia's growth objectives to become a high-income economy by 2045.

 

Q: The EU and Indonesia have been enjoying strong cooperation for over 30 years. What would be the foundations that build a long-lasting good partnership? What would be the priorities of the EU?

A: We have a lot in common in terms of how we look at the world: multilateralism, rules-based, taking in values and norms relating to democracy and human rights. That would be our strong foundation. Moreover, Indonesia is a tremendously important partner for us, the biggest country in ASEAN, population-wise and economic-wise. It's essential for the EU to engage with Indonesia profoundly.

Looking beyond the ASEAN region, the EU has just published a strategy for cooperation with the Indo-Pacific. It is a very comprehensive strategy for engagement with all countries, without exception, with whom we can connect on topics of mutual interest. It is an inclusive strategy, not excluding anyone, but certainly, aiming to boost our relations with Indonesia, a like-minded country in many respects. Therefore, we expect to see an intensification of our cooperation, through more political engagement to start with, then we want to boost the economic agenda strongly.

We are not yet in a situation - between Indonesia and the EU - where we have reached our potential. Our trade is still below potential. Our investment is good, but it still can grow significantly. For sure, that is our priority, the economic relationship, particularly by negotiating a future free trade agreement called the CEPA, Comprehensive Economic Partnership Agreement.

The last priority would be the Green Agenda. We'll start a big multilateral conference about the climate in Glasgow. People around the globe have understood that we have a climate crisis. Besides the COVID-19 crisis, there is a climate crisis happening. We really got to do something and step up our efforts to stop the crisis now. So, the Green Agenda, biodiversity, and sustainable economic growth will be key priorities for the EU to engage with the Indo-Pacific, particularly Indonesia.

 

Q: The COVID-19 pandemic has severely hit the world, and every country is rebuilding or in recovery mode. What are the key features of the EU post-COVID strategy?

A: Of course, post-COVID, we are getting into the new normal, but we still have some work to do for some years to come, recovering and transforming. It's true for Europe. We are growing again, nicely, but we're not yet at pre-pandemic levels for all Member States.

As for the relation with Indonesia, it very much means that we wish to work with Indonesia, to compare our experiences, how we can recover economically and combine that recovery with sustainability, with climate, durable and long term growth. That is a topic we wish to discuss with Indonesia.

I am told that Indonesia will share the same priority. As we know, Indonesia will become the chair of the G20 group of countries starting this December. We understand from the contacts we've had that sustainable growth, Green Recovery, equitable recovery, which is fair to everybody, not just for the rich and emerging economies, but also for the poor economies, would also be the priority. That is going to be a big topic, and we agree with that as the European Union, and we must focus on that dimension of an equitable and fair recovery.

 

Q: How do you see the strategic role of the EU-Indonesia CEPA in the post-pandemic recovery?

A: We wish to accelerate the CEPA negotiations as much as we can. We've had a little bit of a delay due to COVID, pretty prominently, so we have to compensate for that. The EU is totally committed to concluding the negotiations as fast as we can. We see this as a win-win proposition. Both Indonesia and the European Union will win extra GDP growth on top of the base-case scenario. The EU-Indonesia CEPA will not only benefit the Indonesian Small and Medium-sized Enterprises (SMEs) but also the European companies. It will also support Indonesia's growth objectives as stated by President Jokowi, turning Indonesia into a rich, high-income economy by 2045.

Therefore, it is certainly something that we want to pursue. It's a top priority for us.

 

Q: What is the strategic role of ARISE+ Indonesia to support the successful implementation of EU-Indonesia CEPA?

A: Negotiating an agreement is one thing, but implementing it is the next step. We have to be prepared because things don't come automatically. The ARISE+ Indonesia is a fantastic tool. It is very practical to help Indonesian companies improve their capability for exporting to the EU, dealing with regulatory level, and adopting new standards. The key thing for accessing the EU market is to meet standards. The EU market is one of the most developed markets in the world. We have high standards, which sometimes are challenging to meet for new traders or small companies. But it makes sense to invest in this because the EU market is one big single market. Once your product enters the market, it can be sold anywhere in 27 countries to 450 million people, and many clients are waiting for new things of good quality. The ARISE+ Indonesia also supports the Government agencies in identifying and investigating issues encountered by exporters and providing them with technical solutions to improve their export capabilities. That is a very good concrete example of what the ARISE+ Indonesia program has done and can do again.

I also am very much interested in the work done by ARISE+ Indonesia on geographical indications. Geographical Indications are products that are tightly connected with a particular region, with specific conditions of soils, climate and its culture. It needs to be protected for the sake of the cultural and social makeup of the region. That is the first objective. Secondly, geographic indications are worth money on the market. For instance, the Gayo Coffee from Aceh draws a better price with geographical indication label than without it. So, helping the Gayo Coffee producers and sellers from Aceh obtain, implement, protect and market the GI product is crucial. We have worked very well with the Ministry of Law and Human Rights, which has a very active department for Intellectual Property. A couple of weeks ago, I spoke at a seminar to launch the GI Branding Guidelines, one of the project's outcome produced with ARISE+ Indonesia’s support. Again, that is a very concrete and good example of how the European Union supports Indonesia to help Indonesian firms create value and be prepared for increased access to the European market when the CEPA comes into play.

 

Q: Is there any other untapped potential area that you think we should explore for cooperation?

A: The European Union wants to be a green sustainable net-zero economy by 2050. It's 30 years from now. Ambitious, but I am convinced it can be done. We need preparedness in Europe itself, obviously, but also with our trading partners, including Indonesia. Therefore, the priority for us, for our cooperation over the next 5-10 years will be very much to help boost the Green standards in Indonesian society and industries. To achieve that goal, we have to do two things. First of all, to support Indonesia contribute to the Green Global Agenda. Secondly, to help Indonesian companies to grow also while greening themselves. That is a big trick, the big challenge, also the big potential we have discovered in the EU. It is possible to green our economy while at the same time growing our economy, creating extra GDP but cutting carbon dioxide, greenhouse gas emissions at the same time. We've proven it in the EU market. We now want to share that sort of expertise with our partners abroad and particularly with Indonesia.  

The government has published its offer for the UN Conference of Parties for Glasgow in the coming months. It's a reasonable offer. It could be a little bit more ambitious in certain areas, but it's pointless to say this to a partner if you don't offer support and cooperation to help raising that ambition. Our aspiration for the next years is to promote the most ambitious climate sustainability agenda and support Indonesia to achieve that agenda. I expect that  ARISE+ Indonesia to help there as well, in the area of energy, renewable energy, how to support the energy transition at the production level, also at the consumer level. That is certainly an important area where ARISE+ Indonesia can also help.

 

Q: Any other messages that you want to convey to our projects stakeholders?

A: The message is that we, the European Union, is a partner for the long run. We are a partner that is reliable. We may be difficult, complicated and demanding, but we are a partner that can be trusted. See for the future in all partnerships with Indonesia. We have no second agenda, no hidden agenda. We just want to support what's good and help the growth of your country in a sustainable way within the ASEAN region and beyond. Certainly, we hope to see a lot more trade and investment between Indonesia and the EU. There is untapped potential  in some areas. We now need to be forward-looking and work hard together to bring bigger and better trade for both sides, especially for Indonesia.

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