August 9, 2026

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August 9, 2026

Newsletter

The European Post

Policy • Diplomacy • Strategic Insight

LATEST
New EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two DecadesErasmus Opens a 5 Billion Euro Round for Skills and MobilityCeuta Crisis Pushes the EU Toward Faster Migrant ReturnsBulky Parcels Face a Packaging Crackdown From August 12Can Europe Build Its Drone Wall Before 2030 Arrives?Indonesia’s Trade Deal With Europe Nears Its Final SignatureEurope Leans on Beijing to Keep Climate Talks Alive Before AntalyaNew EU Gas Market Rules Take Effect With Consumer SafeguardsDeforestation Regulation Holds Its December Deadline Despite CutsDigital Omnibus Delays Europe’s High-Risk AI Deadline to 2027Europe’s Schools Confront a Widening Basic Skills GapRule of Law Report Finds Progress but Trust Still LagsIRIS2 Gains 66 Satellites as Brussels Signs the Rollout DealNature Restoration Plans Come Due as Member States Race a DeadlineECB Rates Hold at 2.25 Percent as Frankfurt Waits on the DataEU Budget Talks Turn to Cohesion as Ireland Takes OverWildfire Response Stretches Europe’s Emergency Fleet ThinCan Europe’s Quantum Plan Match Its Big Ambitions?Armenia Edges West as Moscow’s Grip Slips AwayEurope Inherits the World’s Aid Bill It Cannot Fully PayAir Passenger Rights Get Their First Overhaul in Two DecadesErasmus Opens a 5 Billion Euro Round for Skills and MobilityCeuta Crisis Pushes the EU Toward Faster Migrant ReturnsBulky Parcels Face a Packaging Crackdown From August 12Can Europe Build Its Drone Wall Before 2030 Arrives?Indonesia’s Trade Deal With Europe Nears Its Final SignatureEurope Leans on Beijing to Keep Climate Talks Alive Before Antalya

Can an Indonesia Trade Deal Loosen Europe’s Reliance on China

Achraf Hakimi
Bureau Chief, Trade Policy

Jakarta: The paperwork now sitting in the Council of the European Union may prove more consequential than any headline from a summit stage. On 29 June the European Commission formally asked member states to sign and conclude the Comprehensive Economic Partnership Agreement with Indonesia, the last procedural gate before a deal a decade in the making finally reaches the point of ratification. If the timetable holds, the agreement enters force on the first day of 2027.

The economics are hard to dismiss. The pact would remove tariffs on more than ninety-eight percent of traded goods by value between the bloc and Southeast Asia’s largest economy, a market of some two hundred and eighty million people that Europe has watched drift steadily into China’s commercial orbit. For European exporters of machinery, chemicals and processed food, the appeal is obvious. For Brussels strategists, the deeper prize is Indonesia’s nickel, the metal at the heart of every electric-vehicle battery, and a supply chain Jakarta has spent years trying to wrestle back from Chinese refiners.

That is also where the friction lives. Indonesia’s ban on raw nickel exports, designed to force processing onshore, has already triggered a bruising dispute at the World Trade Organization. Its palm oil, meanwhile, collides directly with the European Union’s deforestation regulation, which Jakarta has denounced as thinly veiled protectionism. A trade agreement does not dissolve these quarrels; it merely builds a room in which to have them. Whether that room proves durable will depend on how generously Brussels interprets its own green rules when a strategic partner is on the other side of the table.

The politics in Europe are no simpler. The Mercosur experience showed how quickly farm lobbies and green members of the European Parliament can turn a finished text into a ratification battlefield, and there is little reason to expect Indonesian palm oil to receive a warmer welcome than South American beef. Prabowo Subianto’s government, for its part, will want proof that access to European markets is worth the concessions on procurement and labour standards that the deal quietly demands.

Yet the strategic case keeps reasserting itself. Europe cannot preach de-risking from China while ignoring the fastest-growing bloc on China’s doorstep. Indonesia offers minerals, a young consumer market and a government keen to diversify its own dependencies. The question is not whether the agreement makes sense on a map, but whether Brussels and its member capitals can hold their nerve through the parliamentary fight to come. The Commission has done its part. The harder vote now belongs to the twenty-seven.

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