Lower thirds:

00:02 Report by Georg Matthes & Cinta Zanidya
00:25 Dudi Gumilar | Textile businessman
01:12 Shinta Kamdani | Indonesian business association chairwoman
02:03 Shinta Kamdani | Indonesian business association chairwoman

Script:

For Indonesia’s textile industry, the pressure is on. This factory in Bandung, on the island of Java, is desperate for new markets – and hopes to find them in Europe.

RIght now, this cotton linen is hit with EU tariffs as high as 8 percent. Cutting that to zero, the owner says, could save his business.

Dudi Gumilar – Textile Businessman
“The demand in Europe is there, but of course we still have to meet their standards. Right now we only export to Japan, because they are willing to adjust to the conditions of its suppliers, like my factory.”

Since the U.S. trade war, Indonesia has been flooded with cheap Chinese textiles that were once bound for to the American market. So with the domestic market already saturated, this deal with Europe is getting a lot of attention.
The EU is one of Indonesia’s largest trading partners, with bilateral trade worth about 30 billion U.S. dollars last year.

Shinta Kamdani – Indonesian business association chairwoman
“We definitely have very high hopes. I think if we look at the trade, Indonesia and EU in the next five years, hopefully with this agreement, we can perhaps increase 30 to 50% even. That’s really our hope that it will get there.”

The deal is expected to boost Indonesia’s top exports to Europe – including palm oil.
Under the EU’s new deforestation law, palm oil can’t be imported if it comes from recently cleared land. But the agreement is expected to give Indonesia some preferential treatment. Experts agree, Donald Trump’s tariff hikes sped up trade talks around the world. Vietnam and Singapore have already signed deals with Europe. Now, after nearly a decade of negotiations, Indonesia is the third Southeast Asian nation to do so.

Shinta Kamdani – Indonesian business association chairwoman
“I think this agreement will definitely put us in the same level of playing field like Vietnam and other countries, right? Because Vietnam has earlier already signed a CEPA with the EU and if you have seen the number not just trade, but investment has really picked up significantly.”

But market access or fresh investment for Dudi Gumilar's company are still some way off. The deal needs approval from EU member states, and both the European and Indonesian Parliaments. If all goes well, it could take effect in about two years.