As a broad-based Free Trade Agreement, the EFTA-Indonesia CEPA covers trade in goods, trade in services, investment, intellectual property rights, government procurement, competition, trade and sustainable development and cooperation. In the area of trade in goods, the EFTA States abolish all customs duties on imports of industrial products, including fish and other marine products, originating in Indonesia. Indonesia will gradually eliminate or reduce customs duties on industrial products, including fish and other marine products, originating in an EFTA State.
Negotiations towards a CEPA were launched in July 2010, with the first round held early 2011 in Jakarta, Indonesia. Since then, 15 rounds of negotiations and several experts' meetings were held.
The Agreement consists of 12 Chapters, 17 Annexes and 17 Appendices. The Agreement covers the following main subjects:
- Trade in Goods
- Rules of Origin
- Trade Facilitation
- Sanitary and Phytosanitary Measures (SPS)
- Technical Barriers to Trade (TBT)
- Trade Remedies
- Trade in Services
- Protection of Intellectual Property (IPR)
- Government Procurement
- Trade and Sustainable Development
- Institutional Provisions
- Dispute Settlement
Trade in Goods
Industrial Goods and Fish and marine products
With the entry into force of the Agreement, the EFTA States abolish all customs duties on imports of industrial products, including fish and other marine products, originating in Indonesia. Indonesia will gradually eliminate or reduce customs duties on the large majority of industrial products, including fish and other marine products, originating in an EFTA State.
The Agreement also provides for tariff concessions on both basic and processed agricultural products. The schedules for tariff commitment for all products are to be found in annexes II-V.
Rules of Origin
The rules of origin and methods of administrative cooperation between customs authorities are dealt with in Annex I and its Appendices 1-2. The Agreement provides for liberal rules of origin, based on the European model. The rules provide for accumulation with all types of products (industrial and agricultural) among the Parties as well as for the possibility of self-declaration of origin.
The Agreement contains detailed provisions on trade facilitation (Annex VI).
Sanitary and Phytosanitary Measures (SPS)
The Agreement includes provisions on sanitary and phytosanitary measures (Article 2.12) in conformity with the relevant WTO Agreements.
Technical Barriers to Trade (TBT)
The Agreement includes provisions on technical regulations (Article 2.11) in conformity with the relevant WTO Agreements.
The Agreement includes provisions on trade remedies (Articles 2.14-2.17) in conformity with the relevant WTO Agreements.
Trade in Services
Chapter 3 closely follows the approach of the WTO General Agreement on Trade in Services (GATS). It covers trade in all services sectors under all four modes of supply. Separate annexes on movement of natural persons supplying services (Annex IX), recognition of qualifications of service suppliers (Annex X), recognition of certificates of competency and training of seafarers on board vessels registered in Switzerland (Annex XI), telecommunication services (Annex XIII), financial services (Annex XIV) and tourism and travel services (Annex XV) complement the chapter with additional disciplines specific to those sectors. The Parties’ lists of exemptions from most-favoured-nation (MFN) treatment and specific commitments are contained in Annex VIII and Annex XII respectively. Those lists shall be reviewed periodically with the aim to further liberalise trade in services between both sides.
The aim of Chapter 4 is to improve the legal framework conditions for investors from the EFTA States and Indonesia investing in each other’s markets. This is achieved by granting non-discriminatory rights of establishment (“commercial presence”) in economic sectors not covered by the chapter on trade in services and listed in Annex XVI. In certain of these economic areas, the Parties have included reservations to national treatment based on restrictions in their national legislations. The Chapter is subject to periodic review regarding the possibility to further developing the Parties’ commitments.
Protection of Intellectual Property (IPR)
The provisions on protection of intellectual property (Chapter 5, Annex XVII and the Record of Understanding concerning patents) cover, inter alia, trademarks, copyrights, patents, undisclosed information, industrial design and geographical indications, and include provisions for the enforcement of intellectual property rights and cooperation among the Parties. The provisions are based on the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and provide for a high level of protection, taking into account the principles of most-favoured-nation treatment and of national treatment.
The Agreement also includes a transparency provision on government procurement (Chapter 6) providing for the Parties to enhance their mutual understanding of each other´s laws and regulations in the field as well as a stipulation for the publishing of laws, regulations and administrative rulings. The Chapter further foresees further negotiations in the field of government procurement. The Chapter is not subject to dispute settlement.
In Chapter 7, the Parties recognise that anti-competitive business practices have the potential to undermine the benefits of liberalisation arising from the Agreement. They highlight the importance of cooperating on issues relating to competition law enforcement.
Trade and Sustainable Development
The Parties recognise that economic development, social development and environmental protection are interdependent. In Chapter 8, they reaffirm their commitment to multilateral environmental and labour agreements and principles and undertake to uphold levels of protection while recognising the right of each Party to establish its own level of environmental and labour protection. Arbitration procedures do not apply to this chapter.
Chapter 10 establishes a Joint Committee to supervise and administer the Agreement and to oversee its further development. The Joint Committee, which normally meets every two years, may modify the Agreement or consider and propose amendments, as provided for in the Agreement.
Chapter 11 sets out the rules and procedures applying with respect to the avoidance or settlement of any disputes that may arise between Parties concerning the interpretation or application of the Agreement.
For EFTA-Indonesia trade statistics, see EFTA Trade Statistics Tool