The International Trade Council reports that Indonesia and the European Union (EU) have prolonged their negotiations for a Comprehensive Economic Partnership Agreement (CEPA) due to ongoing regulatory challenges. Initiated in 2016, these discussions aim to enhance trade relations by addressing tariffs, non-tariff barriers, and investment opportunities.
A significant point of contention is the EU’s forthcoming Deforestation Regulation, set to be enforced from December 30, 2025. This regulation mandates that commodities such as palm oil, cocoa, and timber imported into the EU must be certified as not contributing to deforestation. Indonesia, a leading palm oil producer, has expressed concerns over the regulation’s potential impact on its exports, labeling it as “regulatory imperialism.”
Additionally, disputes over nickel exports have surfaced. The EU challenged Indonesia’s ban on unprocessed nickel ore exports at the World Trade Organization (WTO), arguing it unfairly restricts access to raw materials vital for European industries.
Despite these challenges, both parties remain committed to advancing the CEPA negotiations. The EU emphasizes the agreement’s potential to bolster economic growth and sustainable development, while Indonesia seeks to safeguard its national interests and economic sovereignty.
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