EU farmers have very little to win from the EU/Indonesia FTA

While the European Commission announced that “the EU-Indonesia Comprehensive Economic Partnership Agreement (CEPA) will open unprecedented access to Indonesia for European farmers and food producers”, Farm Europe raises serious doubts.

The main expected impact is on Indonesian palm oil exports that will benefit from a tariff free TRQ and a 3% tariff out of quota. That is the main Indonesian agriculture export. Regarding European potential export opportunities, the expected impact is rather limited. Indonesia imports mainly soybeans, beef, dairy, wheat, and rice (to cover for domestic shortfalls). 

The EU will face strong competition on beef from Brazil, Australia, and the US. On dairy from New Zealand. On wheat from Russia, US. The EU doesn’t export soybeans, and on rice, it can’t compete against South East Asia.

In addition, the potential EU imports of palm oil will depend on the seriousness of the implementation of the deforestation regulation as well as the phasing out of high iLUC biofuels, mainly palm-based biofuels — and the European Commission is floating the idea of further postponement of this regulation on the same day of the EU/Indonesia agreement, this country being one of the most important opponent to this regulation from the beginning. 

Therefore, we urge the the European Commission to be consistent and fully implement EUDR, with a clear simplification for EU farmers, considering that the EU is a no deforestation risk country, contrary to Indonesia, and to secure a real traceability for due diligence going beyond paper work, but mobilizing already existing satellite imagery to guarantee a sound and efficient implementation of the EUDR.