IEU CEPA to Coordinate Cross-Country Regulatory Frameworks

The agreement between Indonesia and the European Union under the Indonesia–European Union Comprehensive Economic Partnership Agreement (“ IEU-CEPA ”) establishes an obligation to implement Good Regulatory Practices (“GRP”) . Antonius A. Budiman, Head of the European Affairs Sub-directorate at the Ministry of Trade, explained that the GRP cooperation will serve as a continuous coordination mechanism for the formulation and evaluation of regulations between the two countries.

“For GRP, both parties will engage in continuous discussions and coordination to ensure that we minimize gaps within the existing regulatory,” Antonius explained.

According to Antonius, this provision encourages Indonesia to adopt regulatory harmonization practices through the use of Regulatory Impact Assessment (“ RIA ”) to assess the consistency of new policies with CEPA commitments. The implementation of GRP is not only to align existing regulations but also to anticipate future regulatory changes.

According to Antonius, the GRP agreement will establish a flexible regulatory mechanism through dedicated consultations. Through the bilateral dialogue mechanism, both parties are granted opportunities to review regulations issued after CEPA enters into force, if any such regulation is deemed to hinder investment or trade activities.

“For example, if Indonesia has a particular import regulation that creates an obstacle, the bilateral dialogue mechanism will allow both parties to consult in order to find a solution,” he added.