Indonesia’s EU free trade push signals pivot from China-US dominance

[JAKARTA] Indonesia’s bid to finalise its long-delayed free trade agreement with the European Union is being seen as a strategic shift in the nation’s trade policy, as South-east Asia’s largest economy looks to reduce its reliance on major partners such as China and the US.

Known as the Indonesia-EU Comprehensive Economic Partnership Agreement (CEPA), the deal has been under negotiation for more than a decade. But recent high-level engagements, including President Prabowo Subianto’s visit to Brussels on Jul 13, signal that the agreement could finally be sealed by September this year.

Analysts said that Indonesia, currently grappling with 19 per cent US import tariff and declining key commodity exports amid China’s economic slowdown, could find much-needed relief if the free trade agreement with the EU is finalised.