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EU to Strengthen Trade Relations with Indonesia

Jakarta (ANTARA News) – The European Union (EU) is set to deepen trade relations with Indonesia. The two regions have complementary economies, which will help to ensure a “win-win” situation for both.

“Deepening trade relations with the EU will not cause a surge in imports. It will, instead, increase overall trade and lead to a win-win scenario. Today, trade is about plugging into global supply chains,” the President of the European Council, Herman Van Rompuy, said after his meeting with Indonesian President Joko Widodo (Jokowi) here on Wednesday.

At the meeting, President Joko Widodo raised the issue of trade barriers imposed on some Indonesian commodities, one of which was palm and its subsidiary products.

Citing a recent study, Van Rompuy pointed out how it indicated that a comprehensive economic agreement between the EU and Indonesia would boost overall trade and facilitate more foreign direct investment (FDI) from the EU.

“This, in turn, would contribute to the development of a diversified and higher-value-added economy, as well as help turn Indonesia into the manufacturing hub of ASEAN,” he affirmed.

Indonesia and the EU signed a Partnership and Cooperation Agreement that came into force on May 1 this year. The agreement provided a broader institutional framework for development.

In 2013, FDI from the EU reached a record high of US$2.4 billion, which made it the second largest investor in Indonesia after Japan and Singapore.

According to Van Rompuy, Indonesia and the EU have a similar approach towards building bilateral relations. For example, both regions are large democracies committed to regional integration; they are market-based economics; and both respect human rights and international laws.

“I see great potential for expanding cooperation between the new Indonesian government and the European Union over the next five years. This morning, I was particularly interested to hear President Joko Widodo talk about his vision for Indonesia as a maritime axis. I feel that Europe, much of whose trade operations are carried out via the open seas, including the waters of the Indonesian archipelago, has a lot in common with this agenda,” he remarked.

During his visit to Indonesia, Van Rompuy also opened the 5th Europe-Indonesia Business Dialogue and visited the ASEAN Secretariat office located in downtown Jakarta.

Source : www.antaranews.com, Wednesday, 19 November 2014