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CNBC Indonesia - 06 June 2023
The trade minister for Indonesia argued that Europe was discriminating and frequently looked for conflict with Indonesia
By Martyasari Rizky
Zulkifli Hasan, the minister of trade, said frankly that recent difficulties have made cooperation with the EU challenging. As a result, he acknowledged that he was developing a plan to predict how the EU would act.
According to Zulhas, it is becoming more difficult for the EU to enforce the regulations that restrict access to Indonesian goods. The most recent, according to him, was the passing of the EU Deforestation Regulation, also known as the EU Deforestation Regulation.
Whereas this rule has the potential to ban Indonesian agricultural, plantation, and timber products from entering the EU, including coffee, cocoa, cattle, wood, rubber, soybeans, as well as chocolate and downstream goods derived from palm oil. if it is believed to have caused or been the cause of deforestation.
"The government has designated expanding non-traditional markets as one of its top priorities. Due to the unquestionable fall of traditional markets, it was said during a working meeting with Commission VI of the DPR on Tuesday, June 6, 2023.
"The market in Europe is unquestionably declining. The issue then is, Sir. It’s messy and difficult, Sir. Right now, things are difficult for Europe. Including the EU passing a regulation that makes it a requirement for our agricultural products to prevent deforestation. Coffee for small people needs to be certified as being environmentally safe. How could it be possible? Zulhas stated.
Other smallholder farmers who grow cocoa (chocolate), palm oil (crude palm oil/CPO), paper, and other wood products are also burdened by the law, he noted.
And between us and the EU, this has been a prolonged dispute, he added.
"Their origins, including those of timber products, must be looked investigated. It is prohibited if it destroys the forest. According to their translation, it is up to them whether it harms the environment or not," said Zulhas.
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He continued by saying that as a result, the government concentrates on creating access to non-traditional export markets in other countries.
Whereas, by 2024, he aims to complete 34 agreements, including PTAs (preferential trade agreements), FTAs (free trade agreements), and CEPAs (comprehensive economic partnership agreements), which are all forms of free trade.
This objective serves as a 2024 Ministry of Trade (Kemendag) indicator. to accelerate the growth of non-oil and gas value-added exports of goods and services.
The goal for the trade balance is $31.6 to $53.4 billion. Exports other than oil and gas, with a 6.4% objective. A target of 34 agreements was set for the FTA, PTA, and CEPA. That’s a lot of ambition, Sir. Zulhas said, "It’s really hard, but we’ll try."
The Indonesian government is actively looking into CEPAs with Chile.
According to Zulhas, the CEPA would give Indonesia access to markets in other countries in Latin America, such as Mexico.
This agreement is advantageous because it complies with CEPA. Later, practically all of Latin America, including Mexico, will be able to import our products duty-free as well as Chile. Garuda is the parties to this agreement, said Zulhas.