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Indonesia, EU seek ’ambitious’ free trade agreement

Jakarta Post, Indonesia

Indonesia, EU seek ’ambitious’ free trade agreement

By Erwida Maulia, The Jakarta Post, Jakarta

15 June 2011

Indonesia and the European Union (EU) have agreed to commence talks on an “ambitious” free trade agreement (FTA), as both parties seek to boost two-way trade and the EU’s investments in Indonesia.

The European Union is currently negotiating similar trade agreements with a number of other Asian countries including Singapore, South Korea and Japan; and Indonesia doesn’t want to be left behind, Djisman Simanjuntak, co-chair of the Indonesia-EU Vision Group, said Wednesday in Jakarta.

The group, established in late 2009 based on an initiative from Indonesian President Susilo Bambang Yudhoyono and European Commission President Jose Manuel Baroso, handed over on Wednesday its recommendations to the Indonesian government, including for the commencement of negotiations on a Comprehensive Economic Partnership Agreement (CEPA).

Djisman said an FTA was a part of the "triangle" recommended by CEPA, with the other two sides being capacity-building and facilitation.

"We recommend liberalization in the trade of goods and services, and in direct investments," he said while reading out the recommendations.

"We want an ambitious FTA. We call it ambitious because our recommendation to the government is that the FTA [will cover] 95 percent of tariff lines and 95 percent of trade values, covered in a period of nine years," he added.

Djisman said, however, that the “ambitious” FTA should be no reason for concern, as trade relations between Indonesia and the EU had so far been complimentary.

The EU has been exporting mainly machinery exports to Indonesia, while Indonesia has been providing processed resources such as palm oil and textiles to the EU.