(Bloomberg) -- Indonesia wants to conclude a free trade deal with the European Union by the end of next month, covering around $30 billion of trade between the two sides, a senior official said.
The majority of issues — including how to deal with government procurement, state-owned enterprises and local-content rules — have been resolved, according to Jerry Sambuaga, Indonesia’s vice minister for trade. Negotiations are still taking place on a number of outstanding disagreements, including export duties, import licensing, raw materials and transmission and electronics, he added.
We want the trade deal “to be completed this year, hopefully by the end of this month,” Sambuaga said in an interview. “If it cannot be completed this month, maybe next month. We hope to have this done as soon as possible.”
Relations between the two sides have been strained recently over the EU’s Deforestation Regulation, which aims to combat the felling of trees abroad as a result of the bloc’s demand for key commodities, like palm oil and coffee. Indonesia has been one of the most vocal critics of the rules, which are due to come into force at the end of the year, calling for exemptions for recognition of domestic certification schemes.
It’s unclear whether the lack of an exemption or a delay could disrupt the chances of an agreement.
Indonesia’s Prabowo Subianto will be inaugurated as president on Oct. 20, providing one possible timeline for a deal after eight years of talks. A spokesperson for the European Commission declined to comment on whether an agreement is imminent.
--With assistance from Jorge Valero.
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