RELATIONS WITH THE EU
The European Union and Indonesia
EU relations with Indonesia are strong, rooted in shared values and strengthened by our common interests. EU relations with Indonesia reflect the latter’s position as a G20 member, the world's 3rd largest democracy, an economic giant that accounts for 35% of ASEAN GDP and that has an influential position within ASEAN. Indonesia is the first ASEAN country to have concluded a Partnership and Cooperation Agreement (PCA) with the EU, which governs our overall relation and cooperation.
The PCA encompasses dialogues in various areas, such as Political Dialogue, Security Dialogue, Human Rights Dialogue, Trade and Investment, Development Cooperation, Environment and Climate Change, and Fisheries and Maritime Affairs.
Political, Security and Defence
The EU and Indonesia share a long history of cooperation in their commitment to peace and stability. A major example was the 2005 Aceh Monitoring Mission where the EU led a peacekeeping and crisis management operation in the province to monitor the implementation of the peace agreement. This operation was successfully completed in December 2006.
Today, cooperation covers a large number of areas such as: countering terrorism and violent extremism, crisis management, including peacekeeping training and defence education, cyber and maritime security, as well as working against drug trafficking. There is increasing cooperation between the Indonesian Armed Forces (TNI) and specialised Indonesian agencies with their EU counterparts in these areas.
Indonesia and the EU support a rules-based international order and effective multilateralism with the UN at its core. They share the same vision on many foreign policy issues on which they cooperate, from the non-proliferation of weapons of mass destruction to several peace processes across the world.
The EU sees Indonesia as well as ASEAN as major partners in the EU’s Strategy for Cooperation in the Indo-Pacific region, based on common interests and like-mindedness in our respective approaches to regional and multilateral questions.
Human Rights
The EU and Indonesia share a long history of cooperation in their commitment to peace and stability. A major example was the 2005 Aceh Monitoring Mission where the EU led a peacekeeping and crisis management operation in the province to monitor the implementation of the peace agreement. This operation was successfully completed in December 2006.
Today, cooperation covers a large number of areas such as: countering terrorism and violent extremism, crisis management, including peacekeeping training and defence education, cyber and maritime security, as well as working against drug trafficking. There is increasing cooperation between the Indonesian Armed Forces (TNI) and specialised Indonesian agencies with their EU counterparts in these areas.
Indonesia and the EU support a rules-based international order and effective multilateralism with the UN at its core. They share the same vision on many foreign policy issues on which they cooperate, from the non-proliferation of weapons of mass destruction to several peace processes across the world.
The EU sees Indonesia as well as ASEAN as major partners in the EU’s Strategy for Cooperation in the Indo-Pacific region, based on common interests and like-mindedness in our respective approaches to regional and multilateral questions.
Economic Relations, Trade and Investment
With Indonesia on track to become the world’s fifth-largest economy by 2030 and a high-income country by 2045, economic cooperation continues to be a cornerstone of the EU-Indonesia partnership. The negotiations for an Indonesia-EU Comprehensive Economic Partnership Agreement (IEU CEPA), which were launched on 18 July 2016, reflect this. Once concluded, the IEU CEPA will bring the EU-Indonesia trade and investment relations to an entirely new level and promote the exchange of technology and know-how. The future CEPA has the potential to produce €5 billion extra GDP for Indonesia annually.
The EU is the 4th largest trading partner for Indonesia, while Indonesia was the 31st global trading partner for the EU and 5th EU partner in ASEAN. Bilateral trade in goods between the EU and Indonesia amounted to €20.5 billion in 2020, with a trade surplus of €6 billion for Indonesia.
EU investment continued to grow steadily and the EU remains the top non-Asian investor in Indonesia. FDI stocks reached €25.8 billion in 2019. An estimated 1,100 European companies are present in Indonesia, directly employing approximately 1.1 million Indonesians.
Environment and Climate Change
Protecting the environment and addressing global climate change are central concerns of the EU-Indonesia cooperation
In 2015, during Paris Climate Conference (COP21), Indonesia committed to reducing GHG emissions by 29% unconditionally, and up to 41% with international support by 2030, as compared to the 'business as usual' scenario. In particular, the forestry and energy sectors are expected to be the leading sectors in achieving these goals.
EU and Indonesia have achieved several milestones towards the common goal. In 2013, the two sides signed a Voluntary Partnership Agreement (FLEGT VPA) to improve forest governance and promote trade in legal timber and timber products from Indonesia to the EU. Indonesia has set up a legality certification system that eases access for timber to the European market. The EU annually imports around €1 billion’s worth of Indonesian timber and furniture under the scheme.
On other Indonesian environmental priorities, the EU has contributed to low-emission development planning in Aceh, the restoration of peatlands and better information systems for land use and maritime resources.
The EU’s green growth strategy – the Green Deal – aims at moving towards a green, competitive, carbon-neutral economy where economic growth is decoupled from resource consumption and where emissions and pollution are eliminated. In the coming years, the EU and Indonesia will increase cooperation in all these areas, including renewable energies, energy efficiency and circular economy.
COVID-19 Response
To support partner countries in the fight against the COVID-19 pandemic and its consequences, the EU has launched the “Team Europe” approach. “Team Europe” combines resources from the EU, its Member States and European financial institutions. “Team Europe” has mobilised over €200 million in grants and loans to support Indonesia.
Another major support that the EU is providing is for vaccination. The EU has chosen the multilateral track for doing that, namely through the UN-sponsored COVAX facility. The EU is the single biggest vaccine donor of COVAX, and Indonesia is benefitting from the COVAX facility for about 11.7 million doses of vaccines.