EU Companies Holding Out Hope for Progress on EU-CEPA Talks
European businesses operating in Indonesia remain hopeful for a comprehensive economic partnership agreement, known as CEPA, between Indonesia and the European Union despite lackluster progress since negotiations started in 2012, backed by the government's recent pledges to accelerate discussions on the trade agreement.
"We are very much looking forward to seeing [the agreement] move on very quickly and we have constant discussion within the EU delegation that's running this," Ulf Backlund, chairman of the European Chamber of Commerce (EuroCham) in Indonesia, told the Jakarta Globe in Jakarta on Thursday.
Backlund, previously an executive at Swedish packaging company Tetrapak, added there would be "huge interests" from European companies should talks on the CEPA finalize swiftly, although he declined to disclose any specific numbers.
Talks about the CEPA between Indonesia and the Europe Union began under the leadership of former Indonesian president Susilo Bambang Yudhoyono in early 2012, but progress has been slow, largely due to disagreements on tariff reductions, service liberalization and foreign ownership.
Amid an increasingly competitive global economy and falling exports and imports at home, President Joko Widodo announced last year that the government would be reviving and accelerating discussions on a number of trade deals with strategic partners; including the EU-CEPA.
Total foreign direct investment from the European Union to Indonesia stood at 24.2 billion euros ($27 billion) in 2013, according to data from the European Commission. Meanwhile, total trade between Indonesia and the EU reached 24 billion euros last year, where Indonesia saw a 4.9 billion euro surplus, Trade Ministry data shows.
Jakob Friis Sorensen, president director of Maersk Line Indonesia, the local arm of the Danish shipping company, said he hopes to see progress on the discussions soon as "it's quite clear for most people that this is a win-win situation" for Indonesia and the European Union.
"With Thomas Lembong as the new minister of trade, I'm very optimistic that this will push forward," Sorensen, formerly the EuroCham chairman in Indonesia, told the Globe in Jakarta on Wednesday. "The European Union has been ready for a long time for Indonesia."
Britain's ambassador to Indonesia, Moazzam Malik, echoed Sorensen's sentiment, noting that he remains confident of "the commitment of the top, the president and Trade Minister Tom Lembong" in pursuing talks on the CEPA. "They have prioritized [EU-CEPA] as one of the top three trade agreements that they wish to move forward in 2016," he said on Wednesday.
Malik also noted that the trade deal would be important in ensuring Indonesia's competitiveness in the global landscape as the European Union is already making progress on CEPAs with Indonesia's regional neighbors, Vietnam and Malaysia.