Indonesia has called on the Netherlands to support its bid against the European Union’s (EU’s) anti-deforestation regulation.
The Netherlands is Indonesia’s largest European export market, and in 2022, the trade between the two countries reached US $6.23 billion, a 13.8-percent increase compared to US$5.48 billion the previous year.
On Saturday, Indonesian Trade Minister Zulkifli Hasan called the Dutch to push back against the regulation, urging it to “minimise barriers for Indonesian products that meet sustainable standards to enter the EU.”
Indonesia is part of a global coalition of 12 countries from the Amazon, the Congo Basin and southeast Asia, which signed the “United for Our Forests” pact.
The group, home to the world’s most extensive rainforests, allied ahead of COP 28 later this year and criticised “trade restrictions disguised as environmental measures.”
Wood Central understands that this refers to the European Union’s law prohibiting firms from importing goods linked to deforestation.
Speaking to journalists, Minister Hasan said, “Trade between Indonesia and the EU has huge potential, but it could be in jeopardy due to the EU’s anti-deforestation regulation (EUDR).”
Minister Hasan claims that the EUDR has the potential to negatively impact the exports of Indonesia’s flagship products, which include palm oil, coffee, rubber, and timber.
Indonesia is the world’s fourth-largest coffee export market, ranked sixth and eighth for global pulp and paper products.
Earlier this month, a report found a ‘worrying lack of readiness’ amongst the top 100 pulp and paper producers ahead of the EU deforestation regulations.
New Data published by the Zoological Society of London (ZSL) reveals that timber and pulp companies are “largely unprepared” for the new rules.
Once the law is introduced, non-compliant companies will lose access to the EU – the world’s third-largest market after the US and China.
Indonesia and the Netherlands are pushing to complete the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) negotiations in 2024.
“The negotiator team is looking forward to settling the negotiations. Indonesia also hopes that the Dutch government can support these efforts,” Minister Hasan said.
According to the Indonesian Director General of International Trade negotiations, Djatmiko Bris Witjaksono, the implementation of IEU-CEPA is projected to increase the value of trade and investment between Indonesia and the EU.
“The Netherlands is Indonesia’s largest export destination in Europe, so implementing this comprehensive trade agreement will mutually benefit business players in both countries.”
The total trade between Indonesia and the Netherlands in January–June 2023 was recorded at US$2.35 billion.
During the period, Indonesian exports to the Netherlands totalled US$1.87 billion, and Indonesia’s imports from the Netherlands reached US$484.9 million.
Indonesia’s main exports to the Netherlands include industrial monocarboxylic fatty acids, palm oil and its fractions, palm kernel and other solid residues, and copra.