Abstract
The European Commission has emphatically declared that the EU is committed to harnessing globalization by promoting a normative approach to trade. Based on the case study of the ongoing negotiations for a Comprehensive Economic Partnership Agreement (CEPA) with Indonesia, this paper scrutinizes the external conditions for the effectiveness of the European Union (EU) as a norm promoter. Despite the preference of the government to conclude the deal, so far, Indonesia has avoided taking a position on EU-sponsored norms concerning an investment court system and biofuel sustainability standards. This paper explains such a cautious attitude from an international political economy perspective. The proliferation of trade agreements concluded by the EU in the Association of South East Asian Nations (ASEAN) has mobilized the umbrella organization representing Indonesian exporter firms, which has a preferential status as interlocutor of the trade ministry, in support for the European proposals. At the same time, the low degree of trade dependency of the country has empowered Indonesian firms that enjoy the benefits of the large domestic market and, therefore, are in favor of the status quo. Indonesian civil society organizations are also divided on the opportunities and risks associated to the European normative approach to trade. This case study shows how the attempt of the EU to emerge as a normative power through trade has to face the complex political economy incentives and constraints shaping the trade policy of its negotiating partners.
Similar content being viewed by others
Notes
According to World Bank data referring to 2015, Indonesia, ranks 161 out of 178 states in terms of trade openness, which measures the ratio of total import and export volumes to GDP. Such a low level of trade openness is especially remarkable if one compares it with that of the other ASEAN members that have already concluded a trade deal with the EU. Singapore and Vietnam respectively hold the third and seventh position in the same ranking.
References
Amir S (2009) Challenging nuclear: antinuclear movements in postauthoritarian Indonesia. East Asian Science, Technology and Society: An International Journal 3(2–3):343–366
APEC (2010) Guide to Investment Regimes of APEC Member Economies Investment Experts’ Group 2010 Seventh Edition
Apindo (2014) APINDO position paper on Indonesia-European Union (EU) comprehensive economic partnership agreement (CEPA). In: Report
Araujo MBA (2016) The EU deep trade agenda. Law and policy. Oxford University Press, Oxford
Basri MC, Patunru AA (2009) Why government hurts the poor? The case of Indonesia’s rice protection, Paper prepared for the conference on Globalization, Growth and Development in Asia, Luverhulme Center for Globalization and Economic Policy, University of Nottingham, Kuala Lumpur, 13–15 January
Bauer M (2015) Campaign-triggered mass collaboration in the EU’s online consultations: the ISDS-in-TTIP case. European View 14(1):121–129
Björkdahl A, Chaban N, Leslie J, and Masselot A (Eds.) (2015) Importing EU norms: Conceptual framework and empirical findings (Vol. 8). Springer, Cham
Bland B, Donnan, S (2014) Indonesia to terminate more than 60 bilateral investment treaties, financial times, 26 March
Camroux D, Srikandini A (2013) EU-Indonesia relations: no expectations-capability gap? In: Kirchner E, Christiansen T, Jørgensen K, Murray PB (eds) The Palgrave handbook of EU-Asia relations. Palgrave Macmillan, London, pp 554–570
Chandra A, Hanim L (2010) Indonesia. In: Capling A, Low P (eds) Governments, non-state actors and trade policy-making: negotiating preferentially or multilaterally? Cambridge University Press, Cambridge, pp 125–160
Daugbjer C, Swinbank A (2015) Globalization and new policy concerns: the WTO and the EU's sustainability criteria for biofuel. J Eur Public Policy 22(3):429–446
De Flers N (2010) EU-ASEAN relations: the importance of values, norms and culture. EU Center in Singapore Working Paper, 1
DeSombre ER (1995) Baptists and bootleggers for the environment: the origins of United States unilateral sanctions. J Environ Dev 4(1):53–76
DiMaggio J, Powell WW (1983) The iron cage revisited: institutional isomorphism and collective rationality in organizational fields. Am Sociol Rev 48(2):147–160
Douma W (2017) The promotion of sustainable development through EU trade instruments. Eur Bus Law Rev 28(2):197–216
Elsam (2017a) Indonesia Membutuhkan Narasi Tunggal Terkait Resolusi Parlemen Uni Eropa Mengenai Kelapa Sawit. Report
Elsam (2017b) Aiming at opportunity to respect human rights by corporation in law on palm oil, report. In: 31 August
EU-Indonesia Business Dialogue (2013) Indonesian and European business community identify opportunities for growth in moving towards an EU-Indonesia economic partnership agreement, Press release
European Commission (2012) Trade, growth and development Tailoring trade and investment policy for those countries most in need, Final Communication to the Parliament, the Council and the European Economic and Social Committee, SEC(2012) 87 final
European Commission (2017) Reflection paper on harnessing globalization, COM(2017) 240, 10 May
European Commission (2015) Trade for all. Towards a more responsible trade and investment policy. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, COM(2015)497/4, 14 October
European Commission (2018) Report of the 6th round of negotiations for a free trade agreement between the European Union and Indonesia 15 to 19 October 2018, Palembang
Falkner R (2007) The political economy of ‘normative power’ Europe: EU environmental leadership in international biotechnology regulation. J Eur Public Policy 14(4):507–526
Feinberg RE (2003) The political economy of United States’ free trade arrangements. World Econ 26(7):1019–1040
Ferrero-Waldner B (2007) The future of the European Union—managing globalization, Bucerius Summer School Hamburg, speech, August 31
Fitriani E (2015) Indonesia’s strategy toward the EU: anti-colonialism, non-alignment, and equal partnership'. ASIAN Countries’ Strategies towards the European Union in an Inter-regionalist Context, 127
Focus on the Global South (2017) Civil Society Say No to The EU Multilateral ISDS, 22 March, Press Release
Garcia M, Masselot A (2015) EU-Asia free trade agreements as tools for social norm/legislation transfer. Asia Eur J 13(3):241–252. The Global Economy (2018) Trade openness – Country ranking. Available at https://www.theglobaleconomy.com/rankings/trade_openness/. Accessed Jan 2019
Gonzalez Garibay M (2009) The trade-labour linkage from the eyes of the developing countries: a euphemism for protectionist practices? Eur Foreign Aff Rev 14(5):763–784
Gunaryadi (2005) European Union visibility in Indonesia. Asia Eur J 3:49–62
Harrison J, Barbu M, Campling L, Richardson B, & Smith A (2018) Governing labour standards through free trade agreements: limits of the European Union’s trade and sustainable development chapters. J Common Mark Stud, published online March 2018
Headley J (2015) Russia’s complex engagement with European Union norms: sovereign democracy versus post-Westphalianism? In: Björkdahl A, Chaban N, Leslie J, Masselot A (eds) Importing EU norms. Conceptual framework and empirical findings. Springer, Cham, pp 211–229
Hirsch M (2017) Identity matters: the enforcement of Global Human Rights Treaties by European Union’s trade instruments. In International Economic Law and Human Rights, eds. L. Biukovic and Potter, P. Edward. Edward Cheltenham: Publishing
Hoang HH, Sicurelli D (2017) The EU’s preferential trade agreements with Singapore and Vietnam. Market vs. normative imperatives. Contemp Polit 23(4):369–387
Indonesia for Global Justice, the Center for Research on Multinational Corporations (Somo), the Transnational Institute (TNI), Both Ends (2017) Civil society letter of concern on the occasion of the second round of negotiations for an EU-Indonesia Comprehensive Economic Partnership Agreement (CEPA), Report, January
Indonesian Civil Society Coalition for Economic Justice (2016) International economic cooperation in Indonesia: open public space intervention, open letter to from Indonesian people to President JokoWidodo, Ref. Ares(2018)6630700 - 21/12/2018
Indonesian Ministry of Trade (2016) IEU-CEPA scoping paper finalized: Indonesia-European Union enter a new era, press release, Jakarta, 21 April
Industri Bisnis (2016) Cepa Negosiasi Indonesia European Union Comprehensive economic partnership Segera Dimulai, press release, 22 April
International Center for Trade and Sustainable Development (2017) EU Commission: Indonesia trade talks advance to text-based phase, 5 October. Bridges 21:32
Jakarta Post (2017) RI wants external pressure from trade deals to push reforms, 12 June
Kadin (2016) Kadin Sambut Baik Perundingan IEU-CEPA, 19 July, Press Release
Kadin Indonesia, Apindo and Eurocham (2017) Indonesia-EU business inputs towards comprehensive economic partnership agreement, report, 28 November
Khorana S, Garcia M (2013) European Union–India trade negotiations: one step forward, one back. J Common Mark Stud 51(4):684–700
Knörich A, Berger A (2016) Friend or foes? Interactions between Indonesia’s international investment agreements and National Investment law. German Development Institute, Studies
Larsen H (2014) The EU as a normative power and the research on external perceptions: the missing link. J Common Mark Stud 52(4):896–910
Lavenex S, Schimmelfennig F (2009) EU rules beyond EU borders: theorizing external governance in European politics. J Eur Public Policy 16(6):791–812
Lairson TD, & Skidmore D (2016) International political economy: the struggle for power and wealth in a globalizing world. Taylor & Francis
Leeg T (2018) Negotiating sustainable trade: explaining the difference in social standards in US and EU preferential trade agreements. Contemp Polit 24(4):398–417
Luhulima CPF, Panjaitan EM, Widiana A (2009) EU images in Indonesia. In: Chaban N, Holland M and Ryan, P (eds.) The EU Through The Eyes Of Asia: Volume II: New cases, new findings, Asia Europe Foundation, Singapore, pp 93–123
Manners I (2002) Normative power Europe: a contradiction in terms? J Common Mark Stud 40(2):235–258
Marbun (2016) Kadin expects IEU-CEPA negotiations to reach completion, Republika, 22 July
Meissner KL, McKenzie L (2018) The paradox of human rights conditionality in EU trade policy: when strategic interests drive policy outcomes. J Eur Publ Policy 2018:1–19
Oxelheim L (2012) EU-Asia and the re-polarization of the global economic arena. World Scientific Publishing, Singapore
Phillips L (2009) Burmese human rights block to EU-Southeast Asia trade pact. EUobserver, 2 June
Poletti A, De Bièvre D (2014) The political science of European Union trade policy: a literature review with a research outlook. Comp Eur Polit 12(1):101–119
Poletti A, Sicurelli D (2012). The EU as promoter of environmental norms in the Doha round. West Eur Polit 35(4):911–932
Poletti A, Sicurelli D (2016) The European union, preferential trade agreements, and the international regulation of sustainable biofuels. J Common Mark Stud 54(2):249–266.
Poletti A Sicurelli D (2018) The political economy of normative trade power Europe. Palgrave, Basingstoke
Postnikov E, Bastiaens I (2014) Does dialogue work? The effectiveness of labor standards in EU preferential trade agreements. J Eur Public Policy 21(6):923–940
Pramda AJ (2017) Tanpa Amerika Serikat, Kadin Sarankan Indonesia Tidak Ikut TPP, Kompascom, 27 January
Renckens S, Skogstad G, Mondou M (2017) When normative and market power interact: the European Union and global biofuels governance. J Common Mark Stud 55:1432–1448
Ribka S (2016) Government warned about possible imbalance in EU trade talks, The Jakarta Post , 23 September
Sicurelli D (2015) The EU as a norm promoter through trade. The perceptions of Vietnamese Elites. Asia Eur Jl 13(1):23–39
Sitalaksmi S (2017) Employers’ associations in Indonesia. The transformation from state corporatist to professional organization, in Benson, J., Zhu, Y. and Gospel, H. (Eds.), Employers’ Association in Asia. Employer collective action, London and New York, Routledge
Soesastro H, Soejachmoen M (2007) Towards and effective trade policy: challenges for Indonesia, the EU-Indonesia Support Programme, Delegation of the European Commission to Indonesia, Brunei Darussalam and East Timor and the Ministry of Trade of the Republic of Indonesia, Jakarta
TNI (2018) CEPA EU - Indonesia trade agreement round, press release, 18 February
TNI, Somo, Indonesia for Global Justice (2017). Human Rights as a key issue in the Indonesia-EU Comprehensive Economic Partnership Agreement, Briefing Paper, September
Toussaint (2014) Domination of the United States on the World Bank, 1 September, Committee for the Abolition of Illegitimate Debt, Report
Van den Hoven A (2006) European Union regulatory capitalism and multilateral trade negotiations. Values and Principles in European Foreign Policy, eds. S. Lucarelli, I. Manners, Routledge, London, New York, In, pp 185–200
Weatherbee DE (2017) Indonesia’s foreign policy in 2016: Garuda hovering. Southeast Asian Affairs 1:163–176
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher’s note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Sicurelli, D. External conditions for EU normative power through trade. The case of CEPA negotiations with Indonesia. Asia Eur J 18, 57–73 (2020). https://doi.org/10.1007/s10308-019-00537-3
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10308-019-00537-3