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Indonesia’s classification as “standard-risk” under the European Union (EU)’s deforestation regulation (the EUDR) could be an opportunity for the country to seal a long-delayed free trade deal with the bloc, The Star reported.
The country’s “standard risk” classification was seen by businesses as a signal that could boost exports of palm oil, coffee, cacao and other commodities, the 28 May report said.
Trade Minister Budi Santoso said the EU’s move emerged during the final talks to conclude the Indonesia-EU Comprehensive Economic Partnership Agreement, which was expected to be finalised by the middle of this year after being negotiated by the two parties since 2016.
“We’re in the middle of finalisation, and the EU seems to be easing now as we near the final stage,” Trade Minister Budi Santoso was quoted as saying on 21 May.
Indonesia, the world’s largest palm oil producer, has raised concerns over EU law banning imports of commodities linked to deforestation after 2020, as well as requiring traceability and geolocation coordinates of commodities subject to the regulation, effective for large companies from the end of this year.
The country was placed among standard-risk countries with only Russia, Belarus, North Korea and Myanmar placed in the high-risk category, Reuters reported on 23 May.
Under the EUDR’s benchmarking system, countries are classified nations as low, standard or high risk to minimise the EU’s role in global deforestation, with lighter checks for low-risk countries.
The decision to categorise only four countries as “high-risk” has been criticised by environmental groups, with a coalition of 40 non-governmental organisations warning the European Commission in an open letter that “premature conclusions could politicise the benchmarking process,” according to the report.
Although Indonesia’s exclusion from the high-risk group was welcomed by businesses, many said the “low-risk” classification would ease due diligence and cut export costs, particularly for small players, The Star wrote.