The IEU-CEPA: Reflections and A Way Forward

One of those disputes is the European Union -- Certain Measures on Palm Oil Case (DS 593), which involved the RED II, its implementing regulations, and its French TIRIB measure. This dispute was triggered by the EU import prohibition on Indonesian palm oil products, which involved land expansion.

The panel report of this dispute was adopted on 10 January 2025. Both Indonesia and the EU informed the DSB that they agreed that the reasonable period of time for the EU to implement the panel recommendations and rulings would be 12 months (until February 2026).

Besides the DS 593, Indonesia and the EU also had a dispute involving Indonesia's export ban on its nickel ore (DS 592). The panel for this dispute found Indonesian export restrictions were inconsistent with Article XI: 1 GATT (quantitative restriction prohibition).

There are three ongoing disputes in the WTO involving Indonesia and the EU. Those disputes are the DS 616 involving EU Anti-Dumping and Countervailing Duties on Indonesia's stainless-steel exports, DS 618 involving EU Countervailing Duties on Indonesia's biodiesel exports, and DS 622 involving EU Anti-Dumping on Indonesia's fatty acid exports.

A Way Forward for Indonesia and the EU 

The presence of the IEU CEPA is therefore expected to create coordination and cooperation between Indonesia and the EU in avoiding disputes. Such an amicable approach will be in line with Chapter XX of the IEU CEPA, should this agreement be adopted in line with the drafts. 

The adoption of the IEU CEPA should not be perceived solely for further market access liberalization for both parties. Nevertheless, it shall be perceived as an instrument of coordination for both parties before adopting their respective trade-related measures.

This coordination can be conducted through technical consultations by referring to this bilateral agreement. Furthermore, this coordination may refer to the WTO Agreement, the International Labour Organization Treaties, and Multilateral Environmental Agreements, as mentioned by the IEU-CEPA. 

For the Government of Indonesia, these technical consultations shall be led by representatives from the Ministry of Trade (MOT). Due to the miscellaneous substances of the IEU-CEPA, the MOT should also involve other related ministries and non-ministerial agencies.

Those government agencies are among others, consisting of the Ministry of Environment, the Ministry of Marine and Fisheries, the National Investment Coordination Agency, and the Indonesian Competition Commission. These agencies will have a role in supporting the MOT by providing information related to the consultation's subject matter or topics.