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EU – LATIN AMERICA & CARIBBEAN STEPPING UP RELATIONS
Source: EU and Latin America and the Caribbean stand together.

Hendra Manurung1 and Sebastián Sterzer2

1Hendra Manurung is currently a doctoral candidate in International Relations at Padjadjaran University

2Sebastián Sterzer is Head of International Relations Department at the Observatory of International Trade of National University of Lujan, Buenos Aires, Argentina

In December 2020, the European Union and Latin America and the Caribbean (LAC) aim to reaffirm and give new impetus to the strategic partnership through an informal meeting of EU27 and the LAC Foreign Ministers in Berlin, Germany. This is an opportunity to reinforce the close cultural, social and economic bonds, as well as to coordinate our approach in a less predictable international system. 2020, has been particularly difficult for both EU and Latin American and Caribbean regions due to the COVID-19 pandemic and the economic recession it has brought about. However, during 2021, it is time to start thinking again about stepping up relations. The EU is helping people make Latin American and Caribbean ideas become reality. Faced with growing geopolitical rivalry between great powers, it offers cooperation and dialogue centered on improving the lives of citizens. This relationship is a clue to sustaining the multilateral system in matters such as WTO, the Paris Agreement, human rights, arms control and non-proliferation. While, in the international system, economic diplomacy pertains to the full spectrum of diplomacy relating to economic activities in the pursuit of a country’s policy objectives in general and economic goals in particular. Previously, the economic diplomacy follows a policy direction laid down by Indonesian President Joko Widodo, whereby 70 to 80 percent of all resources should be dedicated to more effective and efficient efforts on economic diplomacy, amid a world full of uncertainty and the upsurge of protectionisms posing challenges to many countries.

Further, as the world strives to deliver joint responses to common challenges, from crushing pandemics to tackling climate change, organizations that encourage research cooperation between regional partners are needed more than ever and united in a common cause. This bond was reaffirmed by EURAXESS Latin America and the Caribbean (LAC), which took part in a recent high-level meeting in 2020 of the EU-CELAC Joint Initiative. It served as a valuable reminder of the common bonds that tie research organizations and communities in all regions together and reinforced the importance of researcher mobility and knowledge-sharing in tackling the biggest challenges facing the world.

The Latin American and Caribbean countries are also still faced with new dynamics challenge, such as the need to respond to the demands of a digital and integrated global economy, the pressure to safeguard the environment, adapting to climate change issue, and to promote growth while ensuring fair social outcomes, or the concern to ensure the continuation of a long-term trend of democratic consolidation and sustainable development.

The EU, with its model of regional economic integration and connectivity, can be an important partner of LAC in tackling those challenges. The EU is sharing its full diplomatic, humanitarian and economic support to solving the ongoing crises in certain LAC countries and will continue to promote democratic principles and respect for human rights in its relations with LAC. More broadly, the EU and LAC should work together to preserve multilateralism and a rules based global order, joining forces to deliver ambitious agendas. This strategic partnership should concentrate on four mutually reinforcing priorities: 1) prosperity, 2) democracy, 3) resilience and 4) effective global governance. Under each of these priorities the communication suggests a number of areas and concrete initiatives to advance this agenda, implemented through a more strategic and targeted EU engagement with the region.

Historically, over the last decades, the EU and LAC have reached an unprecedented level of integration. The EU has signed association, free trade or political and cooperation agreements with 27 (twenty seven) of the 33 (thirty three) LAC countries. This all LAC countries included except Argentina, Bolivia, Brazil, Paraguay, Uruguay and Venezuela. The most important of these are the Association Agreements with Mexico, Chile and Central America, the Economic Partnership Agreement with the Caribbean Forum (CARIFORUM) and the Free Trade Agreements with Colombia, Peru and Ecuador. The EU and LAC countries often align in the United Nations, and have closely cooperated on the Paris agreement, and the 2030 Agenda for Sustainable Development. Since 2016, there is close to six million people from EU and LAC live and work across the Atlantic, and more than one third of LAC students studying abroad do so in the EU countries.

Post 2016, in the wider Atlantic Space, the EU has expanded cooperation and builds stronger partnerships with Latin America and the Caribbean grounded on shared values and interests. It is emphasized clearly at ‘A Global Strategy for the European Union’s Foreign and Security Policy’. The EU and Latin America and the Caribbean have a successful and long-standing partnership which united by history and guided by many shared values. Therefore since 1999 EU and LAC are linked by a strategic partnership and grounded on a commitment to fundamental freedoms, sustainable development and a strong rules-based international system. For over twenty years, such a partnership has been a platform for mutually beneficial cooperation, a driver of change and an incubator for new ideas.

Obviously, the economies are closely interconnected. EU is the third largest trade partner of LAC; total trade in goods increased from €185.5 billion in 2008 to €225.4 billion in 2018, and trade in services amounted to almost €102 billion in 2017. The EU is the first investor in LAC, with a foreign direct investment (FDI) stock of €784.6 billion in 2017, whilst the LAC FDI stock in the EU increased substantially over recent years reached to €273 billion in 2017. The EU investment in LAC is significantly higher than the EU FDI stocks in China is €176.1 billion, except Hong Kong; India with €76.7 billion; and Russia with €216.1 billion combined.

Also, the EU has been the largest provider of development cooperation to LAC, with €3.6 billion in grants for bilateral and regional programs between 2014 and 2020, and over €1.2 billion in humanitarian assistance to victims of man-made crises and natural disasters the last 20 years (1996-2016). The European Investment Bank invests in the achievement of the Sustainable Development Goals in LAC, with a focus on climate change mitigation and adaptation, lending a total of €3.4 billion during 2014-2018. Furthermore, the EU’s development cooperation to LAC also focuses on critical areas such as security and the rule of law, environmental sustainability and climate change, agriculture, food and nutrition security, inclusive economic growth for employment creation, public financial management reform, public sector modernization, and regional integration.

Contextually, this communication proposes to strengthen the EU’s political partnership with LAC, setting out a vision for a stronger and modernized bi-regional partnership, in light of changing global and regional realities. This communication should also be read in light of the agreements that exist or are being negotiated between the EU and individual LAC countries or sub-regions; covering virtually the entire region they represent an important vehicle to implement the vision set out here within. It aims to provide strategic direction for EU’s external action with LAC, in line with the principles set out in the Global Strategy for the EU’s Foreign and Security Policy, the European Consensus on Development, the 2030 Agenda for Sustainable Development, the “Trade for All” Communication and the negotiating directives for a partnership agreement between the EU and the African, Caribbean and Pacific Group of States.

Since 2012, the EU has a long and rich experience on promoting cross-border cooperation. The development of territorial cooperation actions, in particular cross-border cooperation, is considered a fundamental factor for the development of regional integration processes, of economic and social cohesion, and of progress. This EU’s cross-border cooperation program is previously being implemented through agreed cross-border analysis and response strategies, formulated in each of the 53 cross-border program. It deals with a wide range of issues, which include: encouraging entrepreneurship, especially the development of SMEs, tourism, culture and cross-border trade; improving joint management of natural resources; supporting links between urban and rural areas; improving access to transport and communication networks; developing joint use of infrastructure; administrative, employment and equal opportunities work.

The overall aim of disseminating the experience of the EU’s regional policy and its best practices in 2015, both in terms of innovation and cross-border cooperation, the “EU-Latin America Cooperation on Cross-Border Regional Innovation Systems in the framework of Regional Policy” project has promoted cooperation between authorities in the border regions of Peru and Brazil, and has identified the innovative sectors key to cooperation between the regions participating in the project. Selected were the regions of Loreto and San Martin, in Peru, and the State of Amazonas, in Brazil, which borders on the Peruvian region of Loreto. As a result of the work aquaculture was considered a field of economic activity boasting great potential and a basis upon which to bolster cross-border cooperation through the creation of an interregional aquaculture value chain. Based on the lessons learned through European countries experiences, and the results of collaboration with local stakeholders, a strategic approach was devised to guide actions at the regional level, making it possible to coordinate and align the different actors in the border area in light of the needs and opportunities posed by the aquaculture value chain as regards Cross-Border Cooperation, and the development of regions, their companies and peoples. It continues with a description of the research and development structure of the participating regions, more consolidated on the Brazilian side, but featuring a very great potential for cooperation.

These Latin America and Caribbean regions also should share the need to fortify the qualifications of the social capital engaged in the aquaculture sector. There is a high rate of informality, which has a considerable impact, giving rise to market failures. The main problems include a weak corporate culture, poor transport and telecommunications infrastructures, and an inefficient energy system as a key resource affecting the costs and production capacities of the other economic activities. Worthy of special note is the lack of an established system to support research and development activities, oriented towards the needs of the business sector, and the limited technological development, which would make it possible to respond to the challenges posed by other areas, such as transport, logistics and energy.

In Latin American countries, border regions and municipalities are increasingly demanding instruments for cross-border cooperation, being a growing field under permanent development. Previously, in May 2008, the European Union and Latin America Summit took place in Lima, Peru, at which, Venezuelan President Hugo Chavez made a number of provocative statements. Countries in the Latin American region appear with the interests of each country, which are competitive and not yet fully synergized. In fact, it is a condition that does not facilitate economic and trade negotiations which took place at the summit.

Both regions must be able to accelerate economic development in the emerging potential economies by driving skillful job through large-scale initiatives in entrepreneurship, small business growth, innovation, and skilling.  In the years ahead, it is expected that the necessary steps to improve the business and investment environment in the intra and extra region should be taken committedly by all stakeholders. The opportunities the agreements provide which is more effective government procurement, better market access, innovation and competitiveness, intra-regional trade and integration into global supply chains should be exploited. Effective and balanced protection of Intellectual Property Rights enhances opportunities for mutual research cooperation and stimulates regional competitiveness and creative innovation. At the same time, trade agreements should further sustainable development, human rights and good governance, which the EU should work together sustainably with LAC to strengthen the implementation of social, labor and environmental provisions in existing agreements, consistent with their shared commitment to the 2030 Agenda for Sustainable Development, and promote responsible management of global supply chains.

During and post global pandemic, The EU should continue partnering with Latin American and Caribbean countries in generating efforts to address persisting macroeconomic challenges in the region, while diversifying and modernizing the different economic models, making them fit for globalization. Suppose, making results sustainable also means to joining forces to reduce socio-economic inequalities, creating decent jobs and making globalization work for all, and the transition towards a green and circular economy development.

INDONESIA-EFTA CEPA 2021: IMPLEMENTATION IN TRADE & INVESTEMENT
EFTA Secretary-General meets Indonesian Deputy Minister of Trade in Geneva to discuss on EFTA–Indonesia Comprehensive Economic Partnership Agreement on April 30, 2021(CEPA)

Writer: Hendra Manurung is currently a doctoral candidate in International Relations at Padjadjaran University, Bandung, West Java

Switzerland, Liechtenstein, Norway and Iceland as EFTA countries are ideal partner due to their high purchasing power markets as well as having the value of large foreign investment to most developing countries. It can be used as an entry point for Indonesia’s trade advantages in goods, services and investment in continental Europe, and the potential export destination with products complementary. The IE-CEPA Agreement benefits for Indonesia are enormous due to Indonesia’s market access expansion to EFTA countries and accelerating the competitiveness quality of Indonesian products. The cooperation between the five countries, involving Indonesia, Switzerland, Iceland, Norway, and Liechtenstein will not harm each other. In fact, there are many benefits that can be obtained, particularly with the zero-tariff policy which is applied to almost 99 percent of Indonesian products exports to EFTA countries.

Indonesia is currently offering EFTA countries commitments in 5 (five) potential investment sectors, namely: 1) agriculture, 2) mining, 3) manufacturing, 4) energy, 5) clean water supply. Indonesia and the European Free Trade Association Comprehensive Economic Partnership Agreement, known as IE-CEPA are targeted to be rolled out in semester II-2021. Indonesian Ministry of Trade and the Chamber of Commerce and Industry of Indonesia continue to finalize the implementation of investment and trade in the four countries that are members of the European Free Trade Association or EFTA.

The four countries are Switzerland, Norway, Iceland and Liechtenstein. In the trade sector, Indonesia will get a 0 percent tariff on the elimination of 7,042 tariff posts or 81.74 percent of the total tariff posts from Switzerland and Liechtenstein, 8,100 tariff posts (94.28 percent) from Iceland, and 6,388 tariff posts (99.94 percent ) from Norway. Through the IE-CEPA cooperation forum, it is likely that Indonesia’s industrial and business sectors can generate exports and gain foreign investment from Europe to support the acceleration of national economic growth. Previously, on March 22, 2021, the Indonesian government and the People’s Representative Council of the Republic of Indonesia officially passed the Draft Law on the Comprehensive Economic Partnership Agreement between the Republic of Indonesia and the EFTA States aka the Comprehensive Economic Partnership Agreement between the Republic of Indonesia and EFTA Countries). In the trade sector, Indonesia can take advantage of a 0 percent rate to boost exports of competitive products to the four EFTA countries.

The Swiss government imposes tariffs of 0 percent for a wide range of gold products and jewellery, textiles, footwear, two-wheeled vehicles, and essential oils. While the government of Iceland, has imposed a tariff of 0 percent for the products of Indonesian export commodities, such as coffee products, footwear, fish oil, fish, shrimp, paper, and furniture.

Moreover, in the investment sector, the Indonesian government has offered commitments in 5 (five) potential investment sectors consisting of 182 sub-sectors. The five strategic sectors include agriculture, mining, manufacturing, energy, and the provision of clean water. Until now, Indonesia has ratified IE-CEPA through Law Number 1 of 2021 concerning the Ratification of IE-CEPA. Currently, Indonesia only has to complete 2 (two) derivative regulations, namely a) regulations of the minister of trade and b) regulations of the minister of finance.

Indonesia-European Free Trade Association Comprehensive Economic Partnership Agreement or Indonesia-EFTA CEPA or IE-CEPA is economic cooperation between Indonesia and the EFTA group of countries consisting of Iceland, Liechtenstein, Norway, and Switzerland. Indonesia’s agreement with an EFTA country is Indonesia’s first comprehensive economic agreement with a country in Europe. In addition to increasing exports, investment and market access to the European continent, IE-CEPA is expected to raise the profile and positive campaign for Indonesian palm oil products globally and encourage the acceptance of sustainability standards for Indonesian palm oil (ISPO) by Switzerland.

In the future after the enactment of the National Bill on IE-CEPA, the government will make supporting regulations to implement IE-CEPA in the form of a Minister of Finance Regulation regarding the procedures for imposition and determination of import duty rates, as well as a Regulation of the Minister of Trade regarding the provisions of a certificate of origin. This comprehensive agreement consists of 12 chapters, 17 attachments, and 17 additional documents from the appendix covering issues of trade in goods and services, investment, protection of intellectual property rights, procurement of government goods and services, and cooperation and capacity building. The IE-CEPA Agreement is Indonesia’s first trade agreement with countries on the European continent. In addition, the Government of Indonesia should immediately prepare strategic steps through coordination efforts with relevant ministries and agencies, as well as stakeholders to implement IE-CEPA which is targeted at the beginning of the second quarter of 2021.

Henceforward, with the passage of the draft law into National Law, the Indonesian Parliament has carried out the constitutional mandate because IE-CEPA and the Omnibus Law is expected able to promote economic transformation and improve public welfare, particularly in promoting post-Covid-19 national economic recovery. IE-CEPA is the initiation of negotiations between Indonesia and EFTA countries starting in 2005 through the establishment of a joint feasibility study, which was followed by negotiations since 2011. Negotiations were suspended in 2014 and reactivated in 2016. The IE-CEPA was signed on 16 December 2018 in Indonesia by the Indonesian Minister of Trade and Ministers representing EFTA countries. This agreement also covers issues of trade in goods and services, investment, protection of intellectual property rights, procurement of government goods and services, and cooperation and national capacity building.

In 2018, the IE-CEPA negotiations have been going on intensively for 8 years since 2010, where the longest CEPA negotiations have ever had by Indonesia to date. Indonesian business actors should seriously optimize the CEPA with the EFTA countries that have been struggling for a long time because based on a survey some of the free trade agreements have stalled or are not being properly utilized. The IE-CEPA negotiations lasted for eight years before finally being declared substantively concluded by negotiators at a meeting in Bali on 29 October to 1 November 2018, and declared final by the Ministers on 23 November 2018 in Geneva, Switzerland. Previously, Indonesia had signed a CEPA with Chile in December 2017 in Santiago. In fact, in 2019 most international events also covers dangerous clashes between major powers in the Middle East and in South Asia. Missile strikes, proxy attacks and challenges to freedom of navigation in the Persian Gulf in mid-2019 raised the possibility of Iran going to war with Saudi Arabia and other regional powers, and potentially with the United States. While India and Pakistan as neighbouring countries also disputed over Kashmir and escalated to open conflict. In Asia-Pacific, these two countries are nuclear-armed states. Henceforth, in both cases, the situation eventually calmed, but not as a result of traditional crisis management. Therefore, in 2019 there were no gains and some further setbacks in nuclear arms control. The USA withdrew from the 1987 Treaty on the Elimination of Intermediate-Range and Shorter-Range Missiles (INF Treaty) and Russia formally suspended its obligations under it. Uncertainty continued about whether the Moscow and Washington bilateral 2010 Treaty on Measures for the Further Reduction and Limitation of Strategic Offensive Arms (New START) would be extended beyond its current expiry date of February 2021. Additionally, discussions on denuclearization between the Democratic People’s Republic of Korea (North Korea) and the USA lost traction during 2019 and by the end of the year, the Iran nuclear deal (2015 Joint Comprehensive Plan of Action) was largely non-functional. Amid the threat of sanctions by European countries to Belarus in the midst of 2021, the arrest of Roman Protasevich, one of the Belarussian dissidents who have been a constant thorn in Lukashenko’s side. Protasevich was pulled off the plane, along with several other Belarusian and Russian nationals. Vilnius has become a hub of opposition to Lukashenko’s rule, with Lithuania rejecting Lukashenko’s legitimacy and providing support and protection to exiles. However, sooner or later, it turns Belarus will become Europe’s North Korea issue.

Switzerland has gained the support of the Senate on December 20, 2019, and followed by a public referendum on March 7, 2021, to implement the IE-CEPA. In IE-CEPA negotiations, Switzerland agreed to accept the certification of sustainable palm Indonesia, the Indonesia Sustainable Palm Oil (ISPO). As for Norway and Iceland has completed their ratification on December 13, 2019, and January 29 2020. Liechtenstein is still in the process of ratification.

Indonesia has full confidence through the implementation of the IE-CEPA implementation in the Comprehensive Economic Partnership Agreement. In the future, it will bring Indonesia’s economy to be stronger, more competitive, and attractive to investors from EFTA’s developed countries. The government needs to take strategic policies to face global challenges which are currently full of uncertainty and promote economic recovery after the Covid-19 pandemic. One is through the Agreement’s IE-CEPA.

Happy Europe Day 2021

On behalf of the Indonesian Community of Europe Studies, we wish to extend our congratulations on the anniversary of Europe Day 2021.

Selamat Hari Eropa 2021.

Together we are celebrating peace and unity, as well as fight Covid-19 to recover stronger.

INDONESIA-FRANCE RELATIONS: STRATEGIC OPPORTUNITIES IN THE INDO-PACIFIC
Source: Ambassade d’Indonésie en France (2020)

Writer: Hendra Manurung is currently a doctoral candidate in international relations at Padjadjaran University, Bandung

In an international context marked by uncertainty and the increase in unilateralism, France’s priority is to propose an alternative: a stable, multipolar order based on the rule of law and free movement, and fair and efficient multilateralism. The Indo-Pacific region is at the heart of this strategy. This strategic region has major global importance in terms of biodiversity and climate change, particularly considering the demographic and economic weight of the area as well as the energy intensity of its natural resources. For France, the Indo-Pacific space is a geographic reality. France is present in the region via its overseas territories, and 93% of its exclusive economic zone is located in the Indian and Pacific Oceans. The region is home to 1.5 million French people, as well as 8,000 soldiers stationed in the region.

France is likely to intensify our mobilization in regional organizations, starting with ASEAN, which aims to remain at the heart of the construction of a multipolar Asia, and of which we are now a development partner, as well as in the Indian Ocean Rim Association, the Indian Ocean Community, the Pacific Community, and the Pacific Islands Forum. Henceforward, France’s strategy for the Indo-Pacific has become one of its priorities for international action since launched by the President of the French Republic during his Garden Island speech in Sydney, Australia in May 2018. In 2021, three years later, the strategy’s implementation is now producing tangible results and major progress in France’s commitments in the region. Paris wants to be more involved in the resolution of regional crises, in the securing of the main shipping routes and in counter-terrorism efforts, including terrorist financing, radicalization and organized crime. Further, it wants to strengthen the ties that bind the countries of the region on the basis of converging visions and shared interests, including with Indonesia, Australia, India, Japan, Malaysia, New Zealand, Singapore, South Korea and Vietnam, while deepening its relations with China, in the strategic framework that is now that of Europeans concern.

The Indo-Pacific has also become France’s strategic geopolitical and geo-economic reality. The global economy’s centre of gravity has shifted from the Atlantic to the Pacific. Six members of the G20, such as Australia, China, India, Indonesia, Japan and South Korea are located in the region. The maritime trade routes linking Europe and the Persian Gulf to the Pacific Ocean, via the Indian Ocean and South-East Asia, have become very important. The region’s growing share of world trade and foreign investment means that it is at the forefront of globalization and tremendous digital technology advance.

The enhancement of bilateral relations between Indonesia and France is pursued in order to achieve the mutual benefit interests and welfare of the people of the two countries, as well as to strengthen relations in various fields, particularly defence, trade, investment, tourism, culture, industry, economy, digital technology, as well as international cooperation.

Indonesia and France bilateral relations have been going on for 70 (seventy) years and have been well established since September 1950, and now both countries continue to improve as identified from the cooperation in various sectors. This cooperation is also evident from a number of dialogue activities and visits between officials of the two countries, both in a bilateral and multilateral framework, as well as mutual support in various nominations/candidacies in international organizations. Since 2011, right on the 60th anniversary of diplomatic relations between Indonesia and France, the two countries have agreed to forge a strategic partnership. Lion Air bought 234 Airbus aircraft in 2013. Although Airbus is a European program, the planes are made in Toulouse and France is recognized for its technologies and its innovative abilities. Last September 2014, Telkomsel chose Thales Technologies and Arianespace to launch its Telkom 3S satellite by 2016. The two countries agreed to establish a Strategic Partnership during the official visit of Prime Minister François Fillon to Indonesia from 30 June to 2 July, which focused on five areas of cooperation, namely: 1) Trade and investment, 2) education, 3) industry defence, 4) socio-cultural / people-to-people contacts, and 5) handling the impacts of climate change.

Henceforth, as one of the strategic economic cooperation partners, the government always maintains and improves bilateral relations with France that have existed for 70 years (1950-2020). In the midst of the global crisis due to the Covid-19 pandemic, maintaining close relations between one country and another need to be maintained sustainably, likewise the emphasis on the relationship between the government and the business world in one country with other countries is also becoming more important. Indonesia and France need to strengthen economic cooperation to face the challenges caused by the Covid-19 pandemic. Among other things, by always maintaining dialogue, including maintaining the flow of goods, especially food, medicine and medical equipment. In June 2020, Indonesia appreciates the assistance to develop health infrastructure in the Covid-19 pandemic that occurred due to the collaboration between Agence Française de Development (AFD) and PT Sarana Multi Infrastruktur (SMI).

This strategic partnership cooperation continues to be well established, until in March 2017, President François Hollande visited Jakarta and held a bilateral meeting with President Joko Widodo. The two leaders agreed to continue to strengthen bilateral cooperation between Indonesia and France, particularly in the fields of the creative economy, education, maritime affairs, sustainable cities development, energy, defence, and infrastructure. Shortly thereafter, President Joko Widodo also met President Emmanuel Macron, who officially became President of France on 14 May 2017, at the G20 Summit meeting in July 2018 in the City of Hamburg, Germany.

Indonesian government has always been committed to prioritizing public health and reviving the economy, prioritizing cooperation with various parties, implementing good government governance and reducing inefficient bureaucracy, and eliminating overlapping regulatory rules.

French entrepreneurs investments have entered into several lines of business in Indonesia. Especially since the visit of the French President to Indonesia on March 29 2017, there have been a number of bilateral agreements in the maritime and fisheries sector, creative economy and sustainable urban development. In addition, France which is well-known for the Eiffel Tower is one of Indonesia’s main export markets in Europe. Indonesian main commodities consist of palm oil, electrical machinery and equipment, rubber, footwear, furniture, and so on. France is also an important partner in development and environmental cooperation. In the first quarter of 2020, the investment disbursed by France to Indonesia was US$ 754 million, an increase from US$ 702 million in the same period in 2019.

Meanwhile, in terms of investment, Indonesian Investment Coordinating Board noted that the realization of French investment in Indonesia reached US$ 16.89 million for 255 projects (2019). This is a significant increase compared to the same period in 2018 which was valued at US$ 13.10 million for 186 projects. At present, Indonesia’s national development is related to the development of the implementation of Indonesian policies in the face of the Covid-19 pandemic, including the Exit Strategy, the National Economic Recovery Program and the Omnibus Law.

In the field of education, the French government together with Indonesia formed a joint working group cooperation forum, which includes, among other things: the double degree program at Masters and the Joint Supervision program at Doctoral Strata which is co-financed. The number of Indonesian students in France is 425 people, which is the highest in the last five years, from 2011 to 2016. Meanwhile, vocational secondary education cooperation has been established through a number of apprenticeship/internship programs in France attended by several vocational school teachers.

The defense cooperation between Indonesia and France is strengthened recently due to the two countries awareness in independence of managing the defense sector, including military tools and personnel maintenance.

Thereafter, as strategic partners, the relations between the two countries have been going well and open up great opportunities to increase defense cooperation. Indonesia needs to strengthen cooperation with France in an effort to strengthen and modernize the main tools of the defense system and advance the national defense industry. It is expected that the mutual cooperation will be established and benefit mutually in accelerating the progress of the defense industry in Indonesia as well as strengthening the Indonesia military defense system through technology transfer, increasing the use of local content and also increasing human resource capacity, as well as French collaboration to make Indonesia a key part of global production in defense equipment products. In the field of defense cooperation, bilateral cooperation between the two countries is based on the 1996 Memorandum of Understanding between Indonesian Ministry of Defense and the French Ministry of Defense in the fields of: cooperation in military equipment, logistics and defense industries. This cooperation was further enhanced through the holding of Military Bilateral Talks between the Indonesia military forces (TNI) Headquarters and the French, namely the AP French Headquarters, namely for the fields of education, information exchange, and dialogue forums.

Meanwhile, for socio-culture, there were a number of Franco-Indonesian associations in France that were particularly active in the arts and culture sector. These associations also contribute to improving good relations, especially people-to-people-contact, between French and Indonesians. On the other hand, there are also a number of universities in France that have Indonesian language programs, which are an asset in introducing Indonesian culture in France. In France every year there are a number of cultural and tourism promotion activities carried out by Indonesia and the local government of France.

During the visit of French President Francois Hollande to Jakarta in March 2017, Indonesia and France signed 5 (five) memoranda of understanding, namely: in the field of urban development sustainability, tourism, defense, science and research, and the exchange of research personnel. Furthermore, with regard to maritime cooperation, Jakarta has requested Paris cooperation in fighting IUU fishing, including making Illegal, unreported and unregulated (IUU) fishing into transnational organized crime.

Meanwhile for the creative economy sector, cooperation in the fields of cinematography, film, fashion and the digital economy will continue to be developed. Further, in the tourism sector, France sees Indonesia as a very large archipelagic country so that transportation needs to be developed and will also increase the number of tourist visits.

Indonesia and France also have a very strong cooperation closely on various international issues, including the issue of Palestinian independence, world peace forces, and against extremism and terrorism. The two countries agreed to fight for this achieving Palestinian-Israeli peace through the concept of two state solutions. Indonesia and France as contributors to the peacekeeping force world under the United Nations, agreed to increase cooperation, including increasing the capacity of the French language for Indonesian peacekeeping forces. The existence of a peacekeeping force is a commitment between France and Indonesia to jointly eliminate conflicts in the world. The spread of tolerance values and eliminate xenophobia as a joint effort to eradicate extremism and global terrorism.

France perceives Indonesia with 270 million inhabitants, which has citizens of the world’s largest Muslim majority country, capable of presenting a tolerant and plural diversity. This is an inspiration for France, namely upholding the principles of freedom and tolerance to eliminate terrorism without discrimination.

It is expected that France together with Indonesia will be able to cooperate more and make new breakthroughs towards significant partnerships in the fields of defense, economy, politics, security, as well as socio-culture. Both countries cooperation supposes are not only beneficial for bilateral interests in short and medium-term, but also regional and international interests, including through mutual support in international forums continuously.

EU SANCTION ON MYANMAR: HUMAN RIGHTS VIOLATIONS
EU sanctions in Myanmar, 22/03/2021

Writer: Hendra Manurung is currently a doctoral candidate in international relations at Padjadjaran University, Bandung

On March 22, 2021, the European Union has imposed sanctions on 11 top Myanmar military officials, including General Min Aung Hlaing who led the coup on February 1, 2021. The sanctions for Min Aung Hlaing are in the form of asset freezing, visa blacklisting and travel ban.  Additionally, EU citizens and companies are forbidden from making funds available to the listed individuals and entities. Further, ten of the eleven persons targeted belong to the highest ranks of the Myanmar Armed Forces, known as Tatmadaw, including the Tatmadaw’s Commander-in-Chief, Min Aung Hlaing, and Deputy-Commander-in-Chief, Soe Win. The other is the new Chairperson of the Union Election Commission for his role in cancelling the results of the 2020 elections in Myanmar. The EU-27 makes it clear that nine other top military officers, as well as the head of Myanmar’s electoral commission, are on the sanctions list as well.

The leader of the military junta is directly involved and responsible for decision making regarding the function of the state, and therefore responsible for the destruction of democracy and the supremacy of the rule of law in Myanmar. Decisions made General Hlaing participate directly responsible for the brutal actions of the security forces that killed more than 700 demonstrators, including children and women.

The EU Council adopted a decision and a regulation establishing a global human rights sanctions regime on December 7, 2020. For the first time, the EU is equipping itself with a framework that will allow it to target individuals, entities and bodies including state and non-state actors, which responsible for, involved in or associated with serious human rights violations and abuses worldwide, no matter where they occurred. Such restrictive measures will provide for a travel ban applying to individuals, and the freezing of funds applying to both individuals and entities. In addition, persons and entities in the EU will be forbidden from making funds available to those listed, either directly or indirectly.

News Europe on ‘Free Myanmar‘, 23/02/2021

The framework for targeted restrictive measures applies to acts such as genocide, crimes against humanity and other serious human rights violations or abuses, e.g. torture, slavery, extrajudicial killings, arbitrary arrests or detentions. Other human rights violations or abuses can also fall under the scope of the sanctions regime where those violations or abuses are widespread, systematic or are otherwise of serious concern as regards the objectives of the common foreign and security policy set out in the Treaty of the European Union Article 21.

The EU previous made-decision has prioritized that the promotion and protection of human rights remain a cornerstone and priority of EU external action. It reflects on how the EU’s determination to address serious human rights violations and abuses. While, On 17 November 2020, the Council approved conclusions on the EU Action Plan on Human Rights and Democracy 2020-2024 which set out the EU’s level of ambition and priorities in this field in its relations with all third countries. In the EU Action Plan, the EU committed to developing a new horizontal EU global human rights sanctions regime to tackle serious human rights violations and abuses worldwide. By adopting Adoption Plan, the Council reaffirms the EU’s strong commitment to further advancing universal values for all.

One of the EU policy instruments is to promote the objectives of the Common Foreign and Security Policy (CFSP), by implementing restrictive measures or giving sanctions. This includes safeguarding EU values, its fundamental interests and security; strengthening and supporting democracy, rule of law, human rights and principles of international law; keeping the peace; preventing conflict and strengthening international security.

A country or population is not a specific EU-27 target but is much more focused on a specific policy-taken or activity, ways to do it, and those who are responsible for the policies that have been implemented by the country’s leaders. Hence, the EU makes every effort to minimize the consequences of its policies which have been detrimental to the civilian population and to activities or persons not sanctioned. Those have always been part of a broader and comprehensive policy approach that includes political dialogue, complementary measures, and are not non-punitive measures.

The EU-27 countries periodically conduct a review of the sanctions that have been imposed. The renewal, amendment and lifting of sanctions made by the EU are finally decided in the European Union Council Session. Restrictive measures imposed by the EU may target governments of third countries, or non-state entities, e.g. companies, and individuals (such as terrorist groups and terrorists). For a majority of sanctions regimes, measures are targeted at individuals and entities and consist of asset freezes and travel bans. The EU can also adopt sectoral measures, such as economic and financial measures, e.g. import and export restrictions, restrictions on banking services) or arms embargoes (prohibition on exporting goods set out in the EU`s common military list. At least, there are 3 given sanctions by the EU, including 1) Sanctions imposed by the UN which the EU transposes into EU law; 2) the EU may reinforce UN sanctions by applying stricter and additional measures e.g. vis-à-vis DPRK (related to the non-proliferation of the weapons of mass destruction on July 30, 2020); 3)  the EU may also decide to impose fully autonomous sanctions regimes e.g. vis-à-vis Syria (related to restrictive measures against Syria human rights violations on April 3, 2017), Venezuela (related to the continuing deterioration of democracy, the rule of law and human rights on November 13, 2017), and Ukraine (related to misappropriation of state funds of Ukraine on March 3, 2014)/Russia (sectoral restrictive measures related to Russia’s actions destabilizing the situation in Ukraine on 1 July and 19 December 2016; 28 June and 21 December 2017; 5 July and 21 December 2018; 27 June and 19 December 2019; 29 June and 17 December 2020).

So far, according to Brussels, the European Union has implemented all sanctions that are fully compatible with its obligations under international law, including those concerning respect for universal human rights and guarantees of fundamental freedoms.

The violence and human rights violations in Myanmar since the military coup on 1 February 2021 have disregarded international legal norms and universal human rights values. ASEAN as the only regional organization in Southeast Asia so far had not been able to do anything in order to ensure political stability and security in Myanmar. Hereinafter, ahead of the ASEAN leaders’ meeting in Jakarta on April 24, 2021, to discuss the current hot topical issue of political stability and the democratization process of Myanmar which is likely to determine the future of democracy in the Southeast Asian country which borders China. There are more than 700 civilians, including children, who have died as a result of military violence. The junta responded to peaceful demonstrations against the military coup on February 2021 with rifle shells. Military forces violence has not discouraged pro-democracy activists. The threat of bullets shooting did not scare them. Protesters, mostly young people, continue to organize demonstrations. Strikes as resistance to the coup continued.

On 28 February 2021, Indonesia has expressed a stance regarding the development of the situation in Myanmar, by issuing a statement: 1) Indonesia is very concerned about the increasing violence in Myanmar which has caused casualties and injuries; 2) Deep condolences to the victim and his family; 3) Indonesia calls on the Myanmar security forces not to resort to violence and to exercise restraint in order to avoid more casualties and prevent the situation from worsening. The anti-coup movement is also supported by a number of armed ethnic militias in the border area, which is a form of sympathy for the loss of civilian casualties in mass demonstrations in various Myanmar cities. Previously, in November 2020, at the ASEAN Summit, ASEAN foreign ministers invited the US President from the 2020 general election to maintain peace in Southeast Asia. The ASEAN Ministerial Meeting is held virtually ahead of the 37th ASEAN Summit from 12 to 15 November 2020, hosted by Vietnam.

Various countries and non-state actors are worried that Myanmar’s internal problems will likely become like Syria. The civil war was protracted, with the civilian death toll increasing, followed by an increase in the number of refugees to neighbouring countries. Myanmar is currently one of the top five sources of refugees in the world. According to the UN high commission for refugees, there are around 1.9 million refugees from Myanmar. As for Syria, it occupies the top position with 6.6 million refugees in 2019.

Henceforth, in responding to the worsening political conditions in Myanmar, there is no other choice for the international community, including ASEAN regional organizations to act proactively as quickly as possible, especially in making decisions and commitments that are planned, measured, directed, decisive, and have an impact on political stability and Myanmar national security. The European Union and the United States have indeed imposed economic sanctions on figures and state companies involved in the recent military coup.

ASEAN together with Indonesia must take a central role in optimizing efforts to resolve the Myanmar problem, given the endless violence, a military junta that is completely reluctant to reduce repression on civilians, and the need for the international community to develop a more assertive and sustainable strategic plan. The communication activities with military junta leaders are only a means of reaching a solution to the crisis. The main thing is how to seek the willingness of ASEAN as a solid regional organization together with the EU, China and the US, to immediately formulate coordinated and targeted policies, so that the military junta will stop killing Myanmar people.

Working Plan Form

WORKING PLAN

GERMANY IN THE INDO-PACIFIC: MAINTAINING COOPERATION WITH INDONESIA
Jakarta, Sitz der ASEAN

Writer: Hendra Manurung (Doctoral candidate in international relations, Padjadjaran University, Bandung)

Asia is the most dynamic growth region worldwide and will continue to consolidate this position in the 21st century. At the same time, Asia is faced with problems of global significance. German foreign policy takes account of both dimensions. The geopolitical power shifting in the Indo-Pacific had a significant impact on Germany: the economies of the European and Indo-Pacific regions which are also closely linked to each other through global trade and shipping chains. Important trade routes pass through the Indian Ocean, South China Sea, and the Pacific Ocean. Suppose, if a conflict occurs that can affect regional security and stability, all of this will certainly also have an impact on Germany political economy interest. Until now, the Indo-Pacific has not had a clear definition of geographic area. Each actor has a different definition. However, Germany recognizes the Indo-Pacific region as the entire territory formed by the Indian and Pacific Oceans.

Germany emphatically supports the EU’s efforts to become an ASEAN strategic partner and also working towards a free trade agreement between the EU and ASEAN as a whole. While France and Italy as the EU member states have now joined Germany in becoming ASEAN development partners.

Germany aim is to strengthen relations with this important region and to expand the cooperation in the areas of multilateralism, climate change mitigation, human rights, rules-based free trade, connectivity, digital transformation and, in particular, security policy. More than half of the world’s population lives in countries formed by the Indian and Pacific Oceans. In the last few decades, countries such as Indonesia, Vietnam, China or India have experienced rapid economic growth. In the midst of a global pandemic, currently, the region is a contributor to 40% of the world’s gross domestic product. With this increase, it is expected, this region has an important role in the economy and politics. Simultaneously, strategic competition is increasing for influence in the region. The Indo-Pacific will become major trending to the development of new international order in the 21st century. Germany wants to expand closer cooperation with countries in the Indo-Pacific.

Currently, the Indo-Pacific region is still facing the challenge of tug of influence and interests between the superpowers and the socio-economic impact of COVID-19. The ASEAN Outlook on the Indo Pacific serves as a guideline for maintaining regional peace and stability. It is expected that Germany can continue to support ASEAN centrality and participate in building a safe, peaceful and prosperous Indo-Pacific region.

The Indo-Pacific region is a priority of German foreign policy. Thus, upon adoption of the guidelines on September 2, 2020 through the German Federal Cabinet of Foreign Ministers, Heiko Maas stated as follows:

‘Prosperity and geopolitical influence in the coming decades will depend on the cooperation Germany has with countries in the Indo-Pacific region. There more than all regions of the world will take place strategic decisions regarding the future arrangement of international regulations. Germany wants to participate in shaping this arrangement so that decisions that occur will be made on the basis of international regulations and cooperation and not on the rights of the great powers’.

 

Further, through this strategy, Germany will actively participate in the establishment of a new international order in the Indo-Pacific region. The Covid-19 pandemic and its effects have shown once again that the rest of the world stands in front of world challenges that can only be overcome if countries will cooperate with one another continuously. An important goal is to strengthen the structure of international cooperation, especially to tie close relations with ASEAN countries, where Berlin also wants to improve cooperation with them in the future, particularly with Jakarta.

In March 2019, the German parliament delegation met the Indonesian Ministry of Foreign Affairs to discuss developments in ASEAN and the Indo Pacific. Several issues that are of concern both bilaterally and regionally include issues related to the Sustainable Development Agenda (SDGs), palm oil, the development of smart cities cooperation, the Jakarta Declaration and projections of the future of ASEAN and the economies of its member countries in the next 10 years (2019-2029). Strengthening the regional architecture and the economic recovery of the Indo-Pacific region after COVID-19 is the main focus for increasing cooperation between Germany and Indonesia. Germany’s commitment as a partner to the Indo Pacific countries to face these challenges is manifested in sustainable practical cooperation in the political, economic and socio-cultural fields.  According to the Indonesian Ambassador to Germany, Havas Oegroseno, Indonesia has great potential to become a partner country in the dual-platform in 2021 and 2023. Although economic conditions have deteriorated in almost all countries including Indonesia, there are at least three interesting economic figures, including 1) Indonesia’s digital economy has generated by around 11% from the previous year. In 2019, Indonesia’s digital economy reached US$ 40 billion and in 2020 amounted to US$ 44 billion, 25% of this increase came from the health sector; 2) during a world economic recession, Indonesia export figure was higher than in the same month in 2013; 3) The increase in investment in Indonesia, especially for domestic investment. During the pandemic period, Indonesia received sixteen investment commitments primarily for diversion and diversification.

For Indonesia which adheres to a free and active foreign policy, this cooperation also emphasizes that Indonesia is very open to expanding cooperation and funding assistance for cooperation programs from various parties, including with Germany. The development of bilateral cooperation with Germany needs to be a priority. The Indonesian government is also ready to offer land to become the centre for German industrial estates, in addition to having prepared around 100 hectares of land. Several other attractive incentives have been prepared by Jakarta, particularly for the development of the German automation and digital innovation sector in Indonesia sooner or later.

For Germany, even in a pandemic like today, industrial technology still remains the central platform for innovation and industrial transformation solutions. However, due to the COVID 19 pandemic, it was decided to postpone the Hannover Messe 2020 exhibition to 2021. The biggest industry exhibition is planned to be held on 12 to 16 April 2021. Indonesia as a partner country for this exhibition is privileged. This is because Deutsche Messe AG (DMAG) as the organizer of the exhibition gave Indonesia the opportunity to become a partner country twice, in 2021 for exhibition on digital platforms, and in 2023 on live platforms. This makes Indonesia the longest partner country in the history of the Hannover Messe.

Indonesia and Germany as fellow members of the G-20 have implemented a form of joint responsibility towards current global important issues, especially related to climate change. This initiative is also a form of synchronization between the challenges of developing urban areas and a commitment to address environmental problems. On March 4, 2021, Indonesia’s determination to carry out green reform in the field of urban infrastructure development has received support from the German Government. Indonesia and Germany agreed to collaborate on “Indonesia – Germany Initiative for Green Infrastructure”. This cooperation is directed at urban area transformation and innovation projects that aim to reduce carbon emission levels in Indonesia. Through this cooperation, Germany will provide funding support of € 2.5 billion, or approximately the equivalent of Rp 41.25 trillion. This funding will be provided in stages over five years in partnership from 2021 to 2026 with the KfW bank, which is the German National Bank for development funding, as well as with GIZ. Four provinces were selected for the implementation of this initiative, namely: West Java, Central Java, East Java and Bali. Each province has a flagship project which is certain to be funded by this initiative. These projects lead to Indonesia’s sustainable green economy and infrastructure.

During the last ten years since 2010, the Indo-Pacific region has gained a more important role both economically and politically. Berlin is currently setting its political economy future with the Indo-Pacific countries. One of the biggest global challenges, but also in the Indo-Pacific region includes fighting against climate change and fighting marine pollution. Germany wants to work together with Indo-Pacific countries to find better solutions to the problem.

There are many areas in which Germany would like to cooperate more closely with the countries of the region, both in the area of strengthening state law and human rights and in the areas of cultural, educational and scientific exchanges. The political security sector, of course, also has a special position and attention for Berlin.

Economic relations must also be developed among other things, through the completion of the European Union free trade agreements with other Indo-Pacific countries. Additionally, through the diversification of cooperative relationships, dependence on one party can be avoided. Further themes such as digitization, networking or technology usages with a vision for the future are of critical importance to Germany’s ability to compete globally. Public communication on free access to information and protection against fake news is also included.

The policy guidelines for the Indo-Pacific region adopted in 2020 by the German government are needed at this time to maintain the country’s geo-economic conditions in the region. With these guidelines, Germany wants to facilitate a European strategy towards the Indo-Pacific. Therefore, the European political approach strategy emphasizes and prioritizes strategic factors connected to closer cooperation, including with the EU region.

In January 2019, China questioned the Indo Pacific concept that Indonesia was proposing to adopt by ASEAN. China does not reject the Indo-Pacific concept that emphasizes principles of openness, inclusiveness, transparency, respect for international law, and the centrality of ASEAN, but also not comfortable with the concept. The Indo-Pacific concept was first popularized by the United States to compete with China’s influence, which is aggressively running trillions of US dollars’ worth of infrastructure projects through the Chinese Belt and Road Initiative. After the US, several countries including Indonesia are trying to develop their respective concepts regarding the Indo-Pacific, to ensure peace, stability and prosperity in Southeast Asia amid the tug-of-war of the constellation of world major powers.

For Germany and Indonesia and other countries in the Indo Pacific, the main challenge for developing the Indo-Pacific concept at this time is to form the foundation of the current concept of an inclusive region. The ASEAN Indo-Pacific concept must not embed the concepts of other countries or blocs. Equality should be part of the AOIP concept because of the principles held in the region. Indonesia treats every country equally.

Germany is one of just a few countries in the world that has combined its numerous measures, both existing and planned, in the Indo-Pacific region to create a coherent political framework. It is important to emphasize that these are guidelines for the entire Federal Government, underlining its common desire to engage to an even greater extent as an influential actor and partner in the Indo-Pacific region and to help maintain the rule-based order in place.

Gemeinsam mit Deutschland und Indonesien das wirtschaftswachstum sowie rrieden und stabilität und sicherheit in der Indopazifischen region fördern.

Indonesia – EAEU Relations: Closer Economic Cooperation
Source: Indonesia – EAEU relations: developing trade and economic cooperation

Writer: Hendra Manurung is currently a doctoral candidate in international relations, Padjadjaran University

Economic diplomacy relates to the use of a state’s economic tools to safeguard its national interests and pursue its national goals, which encompass economic activities of its international relations, including strategies designed to secure trades, generate investments, lend aid, and negotiate free trade agreements or comprehensive economic partnership agreement. Henceforth, in the international system, economic diplomacy pertains to the full spectrum of diplomacy relating to economic activities in the pursuit of a country’s policy objectives in general and economic goals in particular. The economic diplomacy follows a policy direction laid down by President Joko Widodo, whereby 70-80 percent of all resources should be dedicated to more effective and efficient efforts on economic diplomacy, amid a world full of uncertainty and the upsurge of protectionisms posing challenges to many countries.

Moreover, Indonesia’s economic diplomacy should turn the aforementioned challenges into opportunities. In retrospect, for example in 2008 and 2009, the fact that the financial crisis threatened to pose a downward spiral of the global trade and economic growth, had played a vital role in forming collectively international economic responses. In the midst of global pandemic and world economic growth slowdown, it represents how relevant and important international cooperation is to overcome global problems. Taking lessons learned from such experiences, in the face of current global and regional challenges, taking into account the potential fragility of the international economic system, it is important for Indonesia’s economic diplomacy to underscore the need for strong frameworks for multilateral norms setting through, among others, enhancing international economic partnerships.

Henceforward, Indonesia economic diplomacy needs to gauge the current globalization and shifting power balances between the West and China with Russia in a holistic manner, as these developments have created new conditions for governments in all parts of the world to adopt more active economic diplomacy. Also, there has been a paradigm shift from traditional practices of state-to-state economic diplomacy to a more comprehensive approach of multi-dimensional economic diplomacy. Not only does it encompass commercial diplomacy through trade and investment promotion, it also encompasses the expansion of national trading and investment purview, the recalibration of global strategies, including the interlinked mutual reinforcement between economic interests and such underlying factors as geo-politics, development cooperation, and propensity towards the global economy. Jakarta’s efforts to boost foreign trade and attract more FDI will, and must always, be directly interlinked to the grand design of Indonesia’s foreign policy and diplomacy. The interconnection between international trade and diplomacy is absolutely vital, for a stronger economic diplomacy is not simply commercial diplomacy that can be merely accomplished through promotion.

Indonesia’s diplomacy is actually expanding prospective with the aforementioned interlinkage. Indonesia’s diplomacy has been seen as previously focused more on regional and global political issues, whereby Indonesia as a middle-income country has been continuously playing significant roles and showing its strong leadership at regional and international stages. It also necessitates the recalibration of strategies to pervade the need for a specific grand strategy for a more concerted economic diplomacy. Hence, a stronger economic diplomacy must go hand in hand sustainably with the national related-stakeholders strategic vision of regional and global geo-politics and gravitational trends of the global economy. Furthermore, in this regards, economic diplomacy is inseparable from global politics. In the meantime, as Indonesia foreign policy and diplomacy economy sustainable should be collaborative synergy and must not be away from the people, strategies in economic diplomacy must also correlate with the basic needs and interests of the nations.

Indonesia and the EAEU countries show a strong commitment to preparing for a stronger long-term partnership, especially in overcoming the challenges of the global economy and the decline in economic growth after the COVID-19 epidemic. In 2020, Indonesia has strengthened economic cooperation with countries in the Eastern European Region and Central Asia that are members of the Eurasian Economic Union (EAEU), through the process of forming Indonesia and EAEU FTA. Indonesia together with the EAEU countries formed a Joint Feasibility Group in the framework of the formation of Indonesia-EAEU FTA which was approved by the EAEU Trade Ministers on 18 May 2020.

This is the formalization of the establishment of the FTA Indonesia and the EAEU has been initiated in 2017. The formation of the Indonesia-EAEU FTA will certainly be able to encourage the expansion of Indonesia’s export market and increase Indonesia’s trade cooperation with EAEU. EAEU consists of Russia, Kazakhstan, Belarus, Kyrgyzstan and Armenia, which are rich in natural resources, agricultural products, and have technological advantages with large market potential, namely a population of more than 180 million, and GDP according to PPP of US $ 4.4 trillion or GDP per-capita US$ 24,800. In October 2019, Indonesian government and the Eurasian Economic Commission signed Memorandum of Cooperation. Furthermore, for Indonesia, increasingly intensive relations with the EAEU are part of a national trade policy strategy to target non-traditional markets. EAEU is in the 24th place for export destinations from Indonesia and 21st for imports from Indonesia. Indonesia’s main exports to the EAEU are palm oil, panel boards, copra, cocoa butter and margarine.. Meanwhile, Indonesia’s main imports from the EAEU are fertilizer, coal and wheat. In 2019, Indonesia’s total trade with the EAEU reached US$ 2.6 billion, with export and import values of US$ 1.0 billion and US$ 1.5 billion, respectively.

Trade in the January-July 2020 period has decreased by 22.16 percent compared to the same period in 2019. Indonesia and EAEU countries free trade are expected to boost the rate of trade and investment between the two.

The aim of this cooperation is to promote comprehensive cooperation between Indonesia and the member countries of the Eurasian Economic Union towards a higher volume of trade and joint investment, the elimination of trade barriers and closer collaboration in areas of mutual interest.  The areas for both sides cooperation, as follows: regional economy integration, trade policy, economic and macroeconomic growth in the member countries of the Eurasian Economic Union and Indonesia, customs regulations and trade facilitation measures, technical regulations and standardization, sanitary and phytosanitary implementation measures, financial markets, transportation, energy, agriculture, regulations on business competition and anti-monopoly policies, industries, intellectual properties, information technology and the digital economy, trade in services and investment, protection of consumer rights, entrepreneurship development including MSMEs, other fields of mutual interest.

Moreover, the Renminbi currency also has been deliberately allowed to weaken by the Chinese governments’ since August 2019, in which, Beijing’s decision was made as a strategic retaliatory response to restore its trade advantages and negate the effects of the next round of import tariffs. This Chinese policy responds to US President Donald Trump’s decision regarding the dynamics of US bilateral trade relations with China, particularly in the imposition of an additional 10% on Chinese goods worth US$ 300 billion or €269 billion, effective in September 2019. If this US policy implemented, then almost all US imports from China will be subject to high tariffs. Currently, the US imposes a 25% tariff on US$ 250 billion worth of Chinese exporting products.

Indonesia strengthens economic cooperation with countries in Eastern Europe and Central Asia which are members of the Eurasian Economic Union (EAEU), through the process of establishing a Free Trade Agreement (FTA) between Indonesia and EAEU. In addition, the trade sector for the national leading export commodity of palm oil must also take advantage of various trade and investment economic cooperation to build momentum for economic revival and boost Indonesia’s competitiveness during and after the global pandemic, especially with countries that are members of the Eurasia Economic Commission. EAEU is a single market with five members, namely Armenia, Belarus, Kazakhstan, Kyrgyzstan, and the Russian Federation. In 2019, the EAEU group of countries has a population of approximately 183 million and per capita gross domestic product of US$ 27 thousand.

In 2018, Indonesia and the EAEU trade volume reached US$ 2.85 billion, with Indonesian exports to the EAEU amounting to US$ 1.04 billion and imports amounting to US$ 1.81 billion. In general, the trade trend from 2014-2018 increased by 3.37 percent. Indonesia’s main exports to EAEU countries in 2018 were palm oil and its derivatives, US$ 403.19 million; copra coconut, palm kernel or liquefied oil, US$ 69.32 million; margarine, US$ 49.62 million; amino oxygen, US$ 42.71 million; and natural rubber, US$ 34.85 million. Meanwhile, Indonesia’s main imports from EAEU countries are semi-finished iron/steel products, US$ 513.09 million; mineral or chemical potassium fertilizers, US$ 421.63 million; wheat and muesli, US$ 291.65 million; coal and other materials and other solid fuels, US$ 130.24 million; and non-mineral or chemical nitrogen fertilizers is US$ 75.02 million.

Indonesian government committed seeks to make foreign investors comfortable by minimizing various trade and investment barriers. Indonesia is continuously to strive to improve relations trade with the EU by minimizing various trade barriers and investment with partner-countries in the EU. By minimizing barriers, the ease of access to the Indonesian market with its superior export commodities will boost global markets significantly. Indonesia and the EU have a common interest in working together and enhance further cooperation to overcome global challenges on issues such as climate change, poverty, regional conflicts, reducing social exclusion and safeguarding multilateral institutions, including the UN reform.

 

Indonesia-Switzerland relations: Post I-EFTA CEPA Referendum
Source: Indonesia-EFTA countries signed CEPA on 16 Dec. 2018.

Writer: Hendra Manurung (Doctoral candidate in international relations at Padjadjaran University, Bandung)

Switzerland is looking forward to having a national referendum in March 2021 to determine the fate of Indonesia and the European Free Trade Area (EFTA) CEPA agreement. As it is known that the agreement between Indonesia and EFTA member-states was signed in December 2018 and approved by the Swiss parliament in December 2019. EFTA is an inter-governmental organization established to promote free trade and economic integration for the benefits of Switzerland, Norway, Liechtenstein and Iceland and their partner countries.

The EFTA member-countries are non-EU countries with a high average per capita income of more than US$ 80 thousand per year and a combined GDP value of around US$ 1 billion. More than 70 percent of the EFTA countries’ exports go to neighbouring countries in the European Union as the EU has been the main trading partners of EFTA countries for many years.

Henceforth, according to the Swiss constitution, although this agreement has been discussed and approved in Parliament, however, it is still given the opportunity for the public freedom to convey their aspirations. There is a group of NGOs and Swiss farmers who submitted a referendum to reject the I-EFTA CEPA, regarding the substance of the agreement in the arrangement regarding reduced tariffs for Indonesian palm oil. The referendum initiation can take place after the group has collected more than 50,000 signatures. The referendum is planned to be held on March 7, 2021.

I-EFTACEPA is a comprehensive trade agreement related to coverage of market access, trade and investment facilitation and capacity building cooperation. Thus, considering that EFTA is the 23rd group of non-oil and gas export destination countries and the 25th largest country of origin for non-oil and gas imports for Indonesia, it is certain that the benefits of the I-EFTA CEPA Agreement for Indonesia are enormous because it can expand market access to other EFTA countries as generating Indonesian products competitiveness and qualities at Central European markets. Since the end of 2018, the Indonesian ministry of foreign affairs has continued to intensify discussions regarding the ratification of the Indonesian Agreement – the European Free Trade Association (EFTA) Comprehensive Economic Partnership Agreement (IE-CEPA).

I-EFTA CEPA was signed on December 16, 2018 in Jakarta. On 16 December 2018, Ministers and other representatives from the EFTA States and from Indonesia signed a Comprehensive Economic Partnership Agreement. Suppose this agreement strengthens the economic ties and promote trade and investment between the two sides. Historically, Indonesia and EFTA Comprehensive Economic Partnership Agreement (IE-CEPA) negotiations began officially in 2007. These negotiations are an important part of EFTA’s marketable strategy promotion in Southeast Asia region. It is also expected that there are also many opportunities and benefits that can be obtained by Indonesian service trade businessmen as vice versa, particularly in the tourism sector from the enactment of the IE-CEPA agreement, as well as the development of the sustainable tourism sector in Indonesia which is an attraction for tourists from EFTA member countries.

Indonesia and EFTA countries effort to strengthen economic trade and investment relations through a Comprehensive Economic Partnership Agreement (Indonesia-EFTA Comprehensive Economic Partnership Agreement, IECEPA) enable two-way increase and diversification of trade and investment. Increased trade and investment will open new opportunities for both-sides of businesses, workers, and consumers which will have an impact on improving welfare in Indonesia and the EFTA countries. Moreover, EFTA countries foreign investment to Indonesia from 2012 to 2020 has continued to increase significantly from year to year.

Most large companies and micro, small and medium enterprises (MSMEs) will have wider and preferential access to markets that have so far been untouched yet. Lower tariff rates and more administrative processes will easily increase trade. A stable and predictable investment condition will encourage innovation and strengthen competitiveness. An open economy will encourage job creation and improve the standards and quality of life of people.

This agreement also regulates the requirements for sustainability and other terms for Indonesian palm oil. However, these opposing groups do not believe that the regulation will work and reject Indonesian palm oil from entering the Swiss market. In addition, these opponents of Indonesian palm oil honestly reveal that vegetable oil is produced in Switzerland such as sunflower oil, canola, rapeseed and others cannot compete in price and productivity with palm oil. Switzerland opponents are generating campaigning to invite Swiss people to reject the I-EFTA CEPA. However, the Swiss Government together with its business communities is also aggressively carrying out an open campaign for the Swiss public to support the I-EFTA CEPA.

Swiss President who also serves as Minister of Economy stated that if Switzerland was not part of the I-EFTA CEPA, the Swiss economy would suffer huge losses, especially in trade and investment. The Swiss President also said that all Swiss economic activities are related to trade and the I-EFTA CEPA agreement is one of the important accesses to boost trade and attract foreign investment. Meanwhile, the Indonesian embassy in Bern continues to collaborate with various concerning groups in Switzerland to provide recent updates and the latest information related to the improvement of the Indonesian palm oil industry including support for various government policies to improve standards for Indonesia Sustainable Palm Oil.

Indonesia also receives abundant support from business’ associations (Swiss Chambers and Swiss Contact) and other Swiss multi-national corporations operating in Indonesia. Furthermore, Indonesian Embassy in Bern expects that these associations will help provide reliable information to relevant parties in Switzerland regarding policies and improvement developments in the Indonesian palm oil industry as related stakeholders also are fully committed to the application of sustainability principles. It also followed by launching a special website regarding the benefits of the I-EFTA CEPA agreement for the Swiss economy as well as other positive information regarding Indonesian palm oil at the address https://indonesien-ja.ch/, Twitter: https://twitter.com/IndonesienJA.

The results of the I-EFTA CEPA referendum in Switzerland related to palm oil will have a major impact on the prospects for economic cooperation between the two countries, where Indonesia’s exports currently have a surplus of more than US$ 2 billion until November 2020. Thus, there will be greater export opportunities including palm oil exports to EFTA countries if this agreement can be ratified and implemented. Vietnam and Malaysia as Southeast Asian countries are also currently negotiating similar agreements with EFTA countries. However, Indonesia’s foreign relations with Switzerland continue to be strengthened simultaneously through bilateral trade and investment cooperation. It is done through Indonesia-EFTA CEPA free trade agreement and mutual legal aid cooperation in the criminal sector.

In conclusion, I-EFTA CEPA is able to become a means and locomotive for economic growth to bring closer and more prospective bilateral relations between the countries involved. This will hopefully pave the way for stronger economic relations and will make an important contribution to the continuation of sustainable economic growth and prosperity for the people of Indonesia and the EFTA countries.

 

Webinar “Asia-EU Connectivity: Potensi Ekonomi Digital”

Era digital memberikan peluang dan tantangan bagi aktor-aktor internasional untuk dapat mengembangkan ekonominya melalui berbagai cara termasuk dengan digitalisasi ekonomi yang bertujuan untuk membuka kanal baru dalam rangka mengembangkan kesempatan ekonomi yang bersifat digital. Uni Eropa sebagai rezim supranasional yang menaungi negara-negara di kawasan Eropa merupakan salah satu aktor internasional yang menaruh perhatian besar terhadap perkembangan ekonomi digital yang dicerminkan melalui dokumen A New Strategic Agenda 2019-2024. Kebijakan ini kemudian ditegaskan melalui prioritas kebijakan Komisi Eropa 2019-2024 yang salah satu prioritasnya adalah menciptakan ‘A Europe Fit for Digital Age’. Melalui poin ini, Uni Eropa berusaha mewujudkan kawasan Eropa sebagai zona yang cocok dan siap dalam menghadapi era digital. Kemitraan dengan Uni Eropa merupakan kunci penting bagi negara-negara di Asia termasuk Indonesia untuk mengembangkan ekonomi digitalnya. Membangun konektivitas dengan Uni Eropa diharapkan dapat memberikan nilai tambah yang lebih besar bagi hubungan antara Indonesia dan Uni Eropa.
Pemahaman terkait Konektivitas Asia – EU terutama dalam Potensi Ekonomi Digital akan dibahas secara komprehensif dalam Webinar “Asia – EU: Connectivity: Potensi Ekonomi Digital” yang akan dilaksanakan pada:

Hari/Tanggal : Selasa, 2 Maret 2021
Waktu : 13:30 – 15:30 WIB
Media : Aplikasi Zoom Meeting
Meeting ID: 980 7580 4554
Passcode: 757703

Webinar ini juga merupakan kerjasama antara Komunitas Indonesia untuk Kajian Eropa (KIKE) bersama Pusat P2K2 Amerika dan Eropa Kementerian Luar Negeri Republik Indonesia. Yuk, ikut serta dalam acara, peserta akan mendapatkan E-Certificate 🥳🥳.