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Indonesia

Indonesia

The relation between the EU and Indonesia has deepened over recent years. Following successful exploratory discussions in April 2016 to further deepen EU-Indonesia trade and investment relations, negotiations for an EU-Indonesia free trade agreement were launched on 18 July 2016. Seven rounds have been held so far. The eighth round of negotiations will be held from 17 to 21 June.

A Free Trade Agreement (FTA) will develop a key aspect of the overall relationship between the EU and Indonesia, which is framed by the Partnership and Cooperation Agreement. The agreement entered into force on 1 May 2014.

Indonesia is a member of the WTO since 1995 and benefits from trade preferences granted by the EU's Generalised Scheme of Preferences (GSP), under which about 30% of total imports from Indonesia enjoys lower duties.

Trade picture

  • Indonesia is the largest economy in the Association of Southeast Asian Nations (ASEAN). It represents about 35% of the region's GDP and has the largest population (264 million inhabitants in 2017).
  • Bilateral trade in goods between the EU and Indonesia amounted to €26.3 bn in 2018, with EU exports worth almost €10 bn and EU imports worth €16.6 bn.
  • The EU is Indonesia's third largest trading partner while Indonesia is the 31st global trading partner for the EU and fifth EU partner in ASEAN in 2017.
  • Bilateral trade in services between EU and Indonesia in 2017 amounted to €7 bn in 2017, with EU exports amounting for €4.1 bn and Indonesia's exports amounting to €2.9 bn.

EU-Indonesia: Trade in goods

Trade in goods 2016-2018, € billions
Year EU imports EU exports Balance
2016 14.8 10.5 -4.4
2017 16.7 10.1 -6.6
2018 16.6 9.7 -6.9

EU-Indonesia: Trade in services

Trade in services 2015-2017, € billions
Year EU imports EU exports Balance
2015 2.2 4.2 2.0
2016 2.3 4.5 2.2
2017 2.9 4.1 1.2

EU-Indonesia: Foreign direct investment

Foreign direct investment 2017, € billions
Year Inward stocks Outward stocks Balance
2017 0.6 33.1 32.6

Date of retrieval: 17/04/2019

More statistics on Indonesia

EU and Indonesia

Over many years, relations have been framed by the EC Cooperation Agreement with the Association of South East Asian Nations (ASEAN), which was formalised in 1980. On this basis, economic and political discussions have been held regularly. Bilateral dialogues between the EU and Indonesia have included periodic reviews of political, economic and co-operation issues in Senior Official Meetings.

A Framework Agreement on Comprehensive Partnership and Co-operation was signed on 9 November 2009 and entered into force on 1 May 2014. The Agreement provides the basis for holding regular political dialogue and sectoral cooperation and takes bilateral relations to a higher level. The Agreement provides the legal framework to engage and cooperate across a wide spectrum of policy fields, including human rights, political dialogue, and trade.

Following successful exploratory discussions to further deepen EU-Indonesia trade and investment relations, negotiations for an EU-Indonesia FTA were launched on 18 July 2016. The ambition is to conclude a FTA that facilitates trade and investments and covers a broad range of issues, including tariffs, non-tariff barriers to trade, trade in services and investment, trade aspects of public procurement, competition rules, intellectual property rights as well as sustainable development.

A Sustainability Impact Assessment (SIA) has been launched in support of FTA negotiations between the EU and Indonesia. The SIA seeks to assess how trade and trade-related provisions in the proposed FTA could potentially impact economic, social, human rights and environmental elements in each trading partner and in other relevant countries.

To learn more about the SIA, go to the dedicated EU-Indonesia SIA website.

Indonesia in ASEAN

Indonesia is one of the 10 members of the Association of South East Asian Nations (ASEAN), the largest economy in the region in terms of GDP (35%) and the EU’s 5th largest trading partner in ASEAN. It is also one of the fastest growing economies in South East Asia (average GDP growth of approximately 6% in the past 10 years).

The ASEAN region is a dynamic market with some 640 million consumers and ranks as the eighth economy in the world. The countries as a group are the EU's third largest trading partner outside Europe, after the US and China. With a population of over 264 million, Indonesia is the biggest market in ASEAN.

Ensuring better access for EU exporters to the dynamic ASEAN market is a priority for the EU. Negotiations for a region-to-region trade and investment agreement between the EU and ASEAN were launched in 2007 and paused by mutual agreement in 2009 to give way to a bilateral format of negotiations.

These bilateral trade and investment agreements were conceived as building blocks towards a future region-to-region agreement.

Indonesia is the sixth country in the region to start negotiations for a bilateral FTA with the EU, after Singapore (2010), Malaysia (2010), Vietnam (2012), Thailand (2013) and the Philippines (2015). So far, the EU has completed negotiations for bilateral agreements with two of them: Singapore (2014) and Vietnam (2015). Bilateral Free Trade Agreements between the EU and ASEAN countries will serve as building blocks towards a future EU-ASEAN agreement, which remains the EU's ultimate objective.

More information on ASEAN

Trading with Indonesia