Sustainable Impact Assessment for an EU-Indonesia Free Trade Agreement

The Project at A Glance

EU bilateral FTA negotiations with Indonesia were the sixth to be launched with an ASEAN member. The EU is among the top exporters to Indonesia but there is a lot of untapped potential as, despite its size, trade with Indonesia only represents less than 15 percent of EU’s overall trade with ASEAN.

International Economics, with funding from the European Commission, provided guidance and direction on the assessment of the economic impact of the EU-Indonesia FTA negotiations, and in particular, the impact on economic development for both trade partners.

What We Found

The project’s overall objective was to provide for a deep assessment of the potential economic, social, human rights and environmental effects of the anticipated trade agreement between the EU and Indonesia. International Economics worked on the impacts in the EU and Indonesia and mainstreamed several key sustainability issues in the analysis which was used to support the trade negotiations process.

Our Strategy and Impact

The team at International Economics used an integrated approach that combines qualitative and quantitative analysis to estimate the social, human rights and environmental impacts from the FTA. Two liberalisation scenarios were designed and the changes arising from these scenarios were compared to a baseline. A multi-region Computable General Equilibrium model was used for quantitative analysis. This was complemented by qualitative analysis which included review of tariff and non-tariff barriers affecting bilateral trade between EU and Indonesia and stakeholder consultations as well as case studies. The outputs from this project were used by the European Commission to inform its strategy for the trade negotiations.

Our Core Solutions

Governments, international donors, and the private sector face many important questions on the expected outputs and impact before, during and after the implementation of their projects. This is where International Economics Consulting’s team of experts, using innovative methodologies to collect and analyse data, can assist you in tracking the economic, social, and environmental aspects of your project.