RI, EFTA look to jump-start economic talks

Indonesia and members of the European Free Trade Association (EFTA) are looking to restart talks on a comprehensive economic partnership agreement (CEPA), expecting a result that will boost similar discussions.

The CEPA talks between Indonesia and the EFTA — comprising Iceland, Liechtenstein, Norway and Switzerland — began in 2005 but were suspended in May 2014 in anticipation of a leadership change in Indonesia.

EFTA chief negotiator Ambassador Didier Chambovey said he was certain that the two parties could achieve an agreement in the near future as the new administration was taking a more “business friendly” approach to its policies.

“The government is going in the right direction. I think this will certainly attract more investment to Indonesia and, you know, investment is an engine of growth,” he said on Monday during a CEPA discussion.

The government, led by President Joko “Jokowi” Widodo, has instigated various bureaucratic reforms aimed at reducing red tape and improving the business climate.

It has also pledged to attract more foreign investors, a move lauded by many as it would provide financing to support economic growth.

Investment came in second after household consumption as a driver of growth in the country, accounting for 34.2 percent of full-year gross domestic product (GDP) in 2015.

The GDP rose by 4.79 percent on an annual basis last year.

Ambassador Soemadi DM Brotodiningrat, chief negotiator for the Indonesian delegation, said both parties hoped to conclude talks by early next year as they had agreed to take a more realistic approach.

“We are more pragmatic now, unlike before when we were being very idealistic. I think we could wrap things up within the next four rounds,” he said.

At present, pending matters include agricultural and non-agricultural market access.

A single undertaking principle in the talks means that the parties cannot reach an agreement unless every point is agreed upon.

Data from the EFTA showed that merchandise trade with Indonesia amounted to US$2.3 billion in 2015, an increase of more than four times compared to 2004.

EFTA member states exported $737 million worth of goods to Indonesia, mostly machinery and pharmaceuticals.

Indonesia’s exports to the EFTA, on the other hand, reached $1.5 billion in 2015, mainly precious stones, metal, footwear and electronics.

Meanwhile, the Indonesian Chamber of Commerce and Industry’s (Kadin) vice chairwoman for international relations, Shinta Kamdani, said the completion of talks with the EFTA could set a positive precedent for other negotiations, especially on a CEPA between Indonesia and the EU.

Similar to the CEPA with the EFTA, discussions with the EU have been stagnant since 2012.


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