EU strikes deal with Indonesia to strengthen trade ties

The European Union and Indonesia reached an agreement on Sunday to move ahead on a trade deal, marking a major breakthrough between two of the world’s largest economies against the backdrop of global trade tensions.

The two sides “reached a political agreement to advance the trade agreement,” European Commission President Ursula von der Leyen said in a statement Sunday.

“In a volatile world, this is the strength of partnerships,” she said ahead of a joint appearance with Indonesian President Prabowo Subianto.

Subianto arrived in Brussels over the weekend for talks in a bid to secure tariff-free access to the EU for Indonesian goods under the Comprehensive Economic Partnership Agreement (CEPA). While a deal had been under development, one key sticking point had been trade in palm oil products, which conflict with the EU’s anti-deforestation policies.

“We are living in turbulent times and, when economic uncertainty meets geopolitical volatility, partners like us must come closer together,” von der Leyen said in a joint press conference. “So today we’re taking a big step forward in this partnership.”

The move comes just a day after U.S. President Donald Trump sent a letter to Brussels declaring EU exports to the country would be subject to 30 percent tariffs starting Aug. 1, despite Brussels having scrambled to reach a deal with Washington. Two diplomats told POLITICO that they hoped the grace period gave additional time to negotiate an exemption.

“For Indonesia, CEPA is not only about trade, it is about fairness, respect, and building a strong future together,” said Subianto. “The agreement must support our efforts to grow our industries, create jobs, and strengthen our sustainable development goals,” he said.

“We are ready to finalize it soon, in a way that benefits both our peoples,” Subianto said.

Tags: exports, Indonesia, European Union, palm oil, trade deal, agreement, anti-deforestation