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Meeting with Indonesia's Ministel' fol' Economiw-ffair�donesi� Ml'
Dal'min Nasution
Ref.
2017)38
260-1 1/08/2017
Ref. Ares(2020)3403390 - 29/06/2020
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Commissionel' Malmstl'om
Origin: DG TRADE
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Date: 18 July 2017, 11.30-12.15
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Place: Bl'ussels
SCENE SETTER
You will meet Minister Daimin Nasution for the first time. A fo1mer Central Bank Governor and
three times deputy minister, including at the Ministiy of Trade and industiy, Minister Nasution is
a respected technician, who overviews the econoinic policies, coordinates vai·ious ministi·ies and
has a role in the FTA negotiations.
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Indonesia staited issuing refo1m packages in September 2015. However, implementation of the
refo1ms is slow. Trade baiTiers continue to apply in a high number. Minister Nasution is repo1ted
to have pushed for the review or suspension of some conti·oversial regulations ( e.g. a
manufacturing local content requirement in an IPR law and a daiiy products protectionist
regulation). While changes ai·e still uncertain and minor as compai·ed to the high number of
Indonesia's ti·ade resti·ictive measmes - particulai·ly at a time when we are entering into the thii·d
round of FTA negotiations- they ai·e evidence of a more balanced attitude.
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Meeting with Indonesia's Minister for Economic Affairs, Indonesia, Mr
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Darmin Nasution
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Commissioner Malmström
Origin: DG TRADE
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Date: 18 July 2017, 11.30-12.15
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Place: Brussels
• The expected benefits of CEPA risk being nullified by the effect of
the existing trade barriers. Successful conclusion of CEPA will
require economic reforms, including by removing WTO
incompliant or FTA incompliant measures. For instance:
o Export duties: our agreed scoping paper agreed last year
provided for ambitious language on the elimination in
principle of all export duties and the prohibition on
introducing new ones, yet at the latest FTA discussions
Indonesia signalled great difficulty with this.
o Non-automatic import licensing applies to most goods in
addition to cumbersome pre-shipment verifications.
Operators need predictability and legal certainty instead of
arbitrary measures;
o Local content requirements are a systemic issue, as relevant
provisions are found in legislation on energy, raw minerals,
government procurement-related legislation, retail and
franchising, among others;
o Cumbersome and unpredictable sanitary and phyto-sanitary
measures which hamper imports into Indonesia;
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Meeting with Indonesia's Minister for Economic Affairs, Indonesia, Mr
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Darmin Nasution
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Commissioner Malmström
Origin: DG TRADE
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Date: 18 July 2017, 11.30-12.15
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Place: Brussels
o Halal measures which, if fully implemented, would be
extremely trade restrictive and could bring to a halt trade
flows in various sectors, beyond food produce.
• When will reform packages be implemented and enforced? We
need confidence building measures to build trust.
• How does Indonesia intend to solve the termination of expiring
BITs? Investment protection is key.
• CEPA should provide a stable, predictable and transparent long-
term framework for bilateral trade relations, also providing
certainty for exporters and investors on both sides, hereby
stimulating more FDI.
• We regret that Indonesia has not refrained from discontinuing of
Bilateral Investment Treaties with EU Member States, but we hope
CEPA can ensure a smooth transition towards and a new, modern
EU-Indonesia framework for investment and investment
protection.
• We are convinced that the EU and Indonesia share the same
objective of increasing and facilitating bilateral investments to the
benefit of both economies while minimising the risks. This is why
we propose an investment court system – which could over time
evolve into a multilateral investment court.
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Meeting with Indonesia's Minister for Economic Affairs, Indonesia, Mr
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Darmin Nasution
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Commissioner Malmström
Origin: DG TRADE
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Date: 18 July 2017, 11.30-12.15
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Place: Brussels
Visit President Jokowi
• Hope we will find a slot during President Jokowi's state visit to
Brussels to meet also President Juncker. Good if Presidents can
touch base and give steer to the many areas of cooperation between
both sides.
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