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EU is doing Asia-deals as trade war deepens

As President Donald Trump throws global relationships into turmoil in pushing his “America First” agenda, Southeast Asia’s biggest economy has seen an opening to increase its European trade ties.

The EU has recently pulled off trade agreements with Vietnam, Japan, Singapore, Canada, across Africa and even Cuba and is actively negotiating deals with Mexico, Australia, New Zealand, China and the Philippines. A deal with Indonesia would boost two-way trade by $4 billion a year — there was $30 billion of trade between the two regions last year — and strengthen European economic ties to an area rapidly growing in affluence and economic power.

“We want to continue with an open trade agenda despite whatever happens between the U.S. and China,” European Union Ambassador to Indonesia Vincent Guerend said in an interview in Jakarta. “We want to have a larger market share in this big economy which is due to be even bigger in 10, 15, 20 years’ time,” he said.

The Indonesia-Europe economic partnership agreement will boost Indonesian exports of textiles and fisheries products and open up Indonesia for European automakers and machinery exporters. It’s a pact that also looms as a bulwark against rising protectionism and a much needed source of investment and economic growth.

Trump Threat

The threat of a full-blown trade war between the U.S. and China has already seen the International Monetary Fund cut its outlook for the global economy. Worried about U.S. policy under Donald Trump and what that means for the growth landscape, Indonesia is embracing the art of the trade deal.

That the EU has already struck agreements with neighboring countries has also stoked a sense of urgency for Indonesia. “We don’t want to be left far behind,” said Iman Pambagyo, the director general for international trade negotiation at Indonesia’s Trade Ministry.

Read more on Bloomberg.

 

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