Minister Lukita, Excellencies, Elected Representatives, Ladies and gentlemen,
Good morning to you all. May I say it is my great honour to be here with you today at this hugely important annual forum between Indonesian and European business leaders. It has been operating since 2009, and it gives the participants a perfect platform in which to formulate possible solutions and joint recommendations on issues affecting trade and investment between the EU and Indonesia.
This gathering represents nothing less than a loudspeaker to ensure that the voice of business is heard at the highest levels of government.
And I believe that is entirely appropriate, because it is business which will create the growth and jobs to bring greater prosperity to our peoples. Of course, smart and strategic government policy at all levels has an important role to play.
That is why my colleagues and I are in Indonesia. Because we believe that by building strong structures for cooperation at policy level, we can unleash the potential of Indonesian and European businesses to create, innovate, and ultimately generate wealth and jobs.
Our overarching goal, of course, is to agree on a FTA which will benefit both sides in equal measure.
Indonesia is a key partner for the EU, and CEPA would open the door to a combined market of more than 750 million people.
In relation to my own area of responsibility, agri-food trade, the potential is vast. Between 2011 and 2015, the Indonesian agri-food market increased by 57%. There is a growing consumer population here – estimated at 45 million Indonesians today, which is expected to rise to 135 million by 2030.
These people are looking for diverse, high-quality products to feed their families. By 2030, we expect food and beverage spending to account for almost half of annual household spending.
This means there are huge opportunities for European agri-food businesses in this country. And your producers, in turn, will have access to the European market. We are the world's leading trading power in food and drink products. Increasing trade with Europe will lead to increasing prosperity for the people of this great country.
These trends will be facilitated by the Free Trade Agreement currently being negotiated between Indonesia and the EU.
The next round of CETA negotiations is scheduled for January, and I urge you all to be positive and constructive in the months leading up to these talks.
I would also remind you that while the current trade for agri-food products is important, there is massive potential to do much, much more.
To give just one example, yesterday I spoke at an event exploring the options for Indonesia to design a system for classification of origin products. This has been a massively successful undertaking in Europe, and I see no reason why the same cannot be achieved here.
Today, we have over 3400 Geographical indications (or "GIs") registered in the EU.
We can say with confidence that a thoughtful GI policy can have a transformative impact on rural areas, rural economies, rural communities, and rural lives.
This is because of the proven economic benefits they bring: Sales of EU GIs are worth €54.3 billion worldwide, and we estimate that they represent 15 % of our total food and drink exports.
Quality schemes offer a wide range of opportunities for producers: they often get a better price for 'GI' products and hold a stronger position in the food chain.
We are convinced that Indonesia can move in a similar direction, with similar potential benefits.
You already have a number of well-knows GI products, such as Muntok pepper, Gayo Cofee and Kintamani Coffee, but you have the potential to do so much more. To give just one example, your world-famous nutmeg seems the perfect candidate to become a highly marketable GI.
You have clear room for product diversification.
And I would also say that we don't need to wait for CEPA's conclusion to substantially improve market access. More cooperation is needed, and there is already a lot we can do.
Indonesia also needs to develop its structures to business and legal certainty. This will have a strong magnet effect to attract EU investors in the agri-food business, as well as other important sectors.
As you know, for this mission I have the support of 38 representatives of EU agri-food businesses active in sectors with large potential in Indonesia. Some of them represent very big companies, others come from small enterprises. Many of these businesses are interested in investing in Indonesia.
But they have all indicated that they hope to see improved market access conditions.
Import procedures remain complex and burdensome, and progress is sometimes hampered by a lack of transparency. Other obstacles, such as quantitative restrictions for certain products and the allocation of import licences, can make doing business too unpredictable.
SPS and TBT barriers are also an issue.
These limit not only trade opportunities but also possible foreign investments. Transparency and business certainty is a "pre-condition" for investors.
So the challenge for you today is to discuss ways to improve trade facilitation. We need operators, investors and policymakers to support these negotiations.
Making immediate progress on these issues would send strong positive signals to the CEPA negotiators.
I would also like to give a brief word on Halal legislation. I assure you that this is an important concern for EU operators.
But I must add that while we fully respect religious grounds, we will not accept unrealistic rules which would prevent EU trade in practice. To give just one example, manual slaughtering for poultry is not compatible with large scale production for export.
And mandatory labelling for "halal" or "non halal" is not necessary – we believe it should be optional.
EU investors will need legal certainty on this issue too. And please remember that the EU has a long tradition of exporting halal products. We are confident this will be seen as an asset by Indonesia.
Allow me to finish on a more positive note, ladies and gentlemen. The new Indonesian Government has already demonstrated positive moves toward less protectionist measures, and the simplification of procedures for imports.
We strongly encourage these steps, and urge you to transpose them into legislative acts very soon.
In conclusion, the EU is confident that Indonesia is on the right track.
CEPA is a huge opportunity for us both. And I am very confident that our current and future cooperation lead to a very positive outcome.
If we work hard, we can create enormous new opportunities for Indonesian and EU businesses.
Thank you for your attention, and I wish you the best of luck for your discussions.