Dawn | 18 July 2009
Boost for EU’s image
By Shada Islam
It’s been a long time coming. But last week in Yogyakarta, Indonesia and the European Union finally initialled an ambitious cooperation pact aimed at revitalising a so-far uninspiring and lacklustre relationship.
The decision to upgrade ties is important for both sides — as is the timing of the long-awaited deal. For once, the EU is ahead of the US. Although Washington is interested in signing a similar comprehensive agreement with Indonesia, the EU has got there faster.
The pact, initialled only days before US Secretary of State Hillary Clinton makes a much-anticipated appearance at the Asean Regional Forum in Thailand next week, therefore gives a much-needed boost to Europe’s reputation in Asia. It also comes close on the heels of a decision by the Association of Southeast Asian Nations (Asean) to allow the EU to join the Treaty of Amity and Cooperation, a peace accord signed by Asean in 1976. Clinton is expected to sign the treaty during her stay in Thailand.
Most crucially for Europeans seeking to reinforce their global diplomatic standing, the EU-Indonesia agreement gives the EU a higher political profile in Southeast Asia and beyond, in the wider Asian region. It also gives a much-needed fillip to the EU’s uncertain and shaky standing in the Muslim world.
Sealing a pact with Indonesia may not translate into an immediate change in Asian attitudes towards Europe, but it will help dispel a growing perception in many Southeast Asian countries that the 27-nation bloc has lost interest in the region as it focuses on reinforcing political and economic ties with China. For Indonesia, the rewards are just as high. On the practical front, the EU-Indonesia Partnership and Cooperation Agreement (PCA) covers areas as diverse as trade, transport, climate change, human rights, migration, tackling organised crime and communicable diseases. It will involve senior-level discussions, probably at the ministerial level, at least once a year and lower-level meetings more often.
However, the political fallout from the meeting is arguably even more important: Indonesia becomes the first Asian country to initial a PCA with the EU, ahead of both China and India. After years spent in the shadows of the two emerging Asian economic giants, Indonesia can finally savour the spotlight. Signature of the agreement was held up for two years after Jakarta halted the initialling process after the EU imposed a ban in 2007 on all Indonesian airlines entering European airspace. The ban ‘touched the pride of a nation’ said Retno Marsudi, Indonesia’s director general for European and US affairs in an article published in the Jakarta Post, adding: ‘It was like a pebble in a shoe.’ Europe’s Aviation Security Committee gave a thumbs-up to improvements in Indonesian air safety standards earlier this month, allowing both sides to initial the cooperation agreement and draw up plans to sign the pact in autumn.
The potential for improving EU-Indonesia trade and economic ties is enormous: bilateral trade between the EU and Indonesia totalled $18.5bn last year but both sides predict that trade and investments will rise in the coming years. Brussels does have serious concerns about Jakarta’s creeping protectionism, however, with EU officials voicing concern at Indonesia’s restrictions on pharmaceuticals and imports of products like shoes, textiles and food.
Such concerns increased earlier this year when Indonesia’s trade minister reportedly suggested that the country’s civil servants should buy and wear only locally made shoes. The proposal was dropped after the trade ministry warned that such a move would be in blatant violation of World Trade Organisation rulings and could prompt similarly restrictive action by other nations. The focus on Indonesia reflects a growing sentiment in Europe that the bloc must engage with many Asian countries, not just China.
As such, prompted to a large extent by Washington’s lead — Hillary Clinton visited Indonesia and the Asean secretariat in Jakarta during her first foreign tour earlier this year — EU policymakers are determined to pay renewed attention to Southeast Asia, a region with over 550 million people, the world’s largest Muslim nation, an economy of over $1tr, and some of the world’s most strategic waterways. Increasingly while acknowledging China’s predominance as Asia’s most dynamic economy, there is a growing recognition in Brussels that Southeast Asia is a region which is also likely to play a critical role in determining the future of Asia.
As such, after years of fascination with China, the EU appears to be broadening its engagement with Asia.
Negotiations on a free-trade agreement are underway with India. The EU and Pakistan held a first-ever summit in June. Japan is demanding a rethink of relations with Europe and the EU and South Korea are on the verge of signing a free-trade agreement, the first such deal signed by the EU with an Asian country. Before exploring bilateral agreements with individual Asean states, the EU sought — unsuccessfully — to update its decades-old cooperation agreement with Asean as a whole.
The focus on Asean reflected a belief that as an organisation committed to regional integration, the EU should do its best to encourage and nurture other bodies working for regional unity. Attempts to negotiate a new EU-Asean agreement were shelved, however, after military-ruled Myanmar joined the organisation. (The EU has imposed sanctions on Myanmar and contacts with the country are restricted).
Since then, the EU has sought to conclude bilateral agreements with Asean states that are ready to take that road. Indonesia is, of course, well placed to take the global and regional centre stage. Elections held earlier this month have consolidated the image of the country as the world’s most respected and respectable Muslim democracy and given an even stronger boost to former general-turned-democrat President Susilo Bambang Yudhoyono.
President Yudhoyono now has a real opportunity to transform the world’s most populous Muslim majority nation into an economic leader with a much louder voice in the region. Jakarta’s pact with the EU could speed up that process.
The writer is Dawn’s correspondent in Brussels.