TEMPO.CO, Jakarta - Indonesian Trade Minister Budi Santoso ensured that the negotiations for the Comprehensive Economic Partnership Agreement between Indonesia and the European Union (IEU-CEPA) will be concluded soon. "As we approached the European Union, it seemed to soften," Budi said at his office on Wednesday, May 20, 2025.
He targeted the trade agreement between Indonesia and the 27 European countries to be concluded earlier this year. "So, we will continue the negotiations, and there will be many changes," he said.
Budi initially aimed to finalize IEU-CEPA in the first quarter of 2025. However, several factors hindered it. "At that time, it was difficult to arrange a meeting, meaning the timing for the agreement was off." As a result, Budi mentioned that Indonesia has not yet secured a trade agreement with EU countries.
Nevertheless, he denied that the agreement was consistently postponed. "It's not consistently postponed; it's only been postponed once," said Budi, referring to the initial target of the first quarter. He says the IEU-CEPA agreement is crucial for expanding Indonesia's access to foreign markets.
Budi believes that the IEU-CEPA agreement is not only beneficial to Indonesia, but also could open doors for EU products to enter the domestic market. With mutual benefits, he stated that IEU-CEPA is a fair trading system for each country.
The Trade Minister in President Joko Widodo's era, Zulkifli Hasan, previously urged the IEU-CEPA agreement to be concluded in September 2024. At that time, Zulhas stated that Indonesia had fulfilled many of the EU's demands. However, he said that the demands continued to increase in each negotiation.
This made the negotiations difficult. "We want IEU-CEPA to be completed, but it also depends on the other party," said Zulhas in Kampung Bangkong Reang, North Cikarang, Bekasi Regency, on Thursday, September 26, 2024. "Yes, (completed this weekend), but if the other party doesn't want it, then it can't be done," he added.
The Director General of International Trade Negotiations at the Trade Ministry, Djatmiko Bris Witjaksono, stated that the impasse occurred because neither party could find common ground on policy issues. "There are still some issues related to policy that have not been resolved, meaning we are still finding the middle ground on those issues," said Djatmiko in a press conference at the Coordinating Ministry for Economic Affairs office, Central Jakarta, Wednesday, September 25, 2024.
Several issues are still hindering the agreement between the two parties. Djatmiko stated that the issues include Europe's desire for Indonesia to relax its restrictions. According to him, the government has been unable to meet that demand. He acknowledged that the EU Deforestation Regulation (EUDR) also posed a hindrance.
Regarding deforestation, Djatmiko hoped that it would be one of the EU's commitments. As of today, he admitted that they have not received that commitment. However, he acknowledged that this issue is not easy. He stated that the government will continue to calibrate the issue.
To overcome the negotiation obstacles, Djatmiko stated that there is a way out that both parties can take. The way out is to put aside the issues that are still challenging. Once both parties have agreed to the terms of the agreement, it remains subject to change.
Han Revanda contributed to the writing of this article
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