Indonesia is taking a firm stance against the European Union’s Deforestation Regulation (EUDR), arguing that it risks creating unfair trade barriers for developing nations. As the regulation nears implementation, Indonesia has mobilized diplomatic efforts and rallied support from 17 like-minded countries to push for a more inclusive, multilateral approach. The issue sits at the intersection of global trade, environmental governance, and economic justice.
Key Facts & Background:
- Policy in Focus: European Union Deforestation Regulation (EUDR), set to take effect in December 2025.
- Scope of EUDR: Targets seven key commodities and their derivatives: palm oil, wood, coffee, cocoa, rubber, soy, and livestock products.
- Indonesia’s Position:
- EUDR may disproportionately impact developing countries, especially smallholder farmers and MSMEs.
- The regulation could violate WTO principles of non-discrimination and fair trade.
- Implementation details remain unclear, including definitions of deforestation, forest degradation, country risk classification, and technical guidelines.
- Diplomatic Response:
- Indonesia has formed a coalition of 17 Like-Minded Countries to challenge EUDR’s unilateral approach.
- Member countries include Argentina, Brazil, Bolivia, Colombia, Dominican Republic, Ecuador, Ghana, Guatemala, Honduras, Ivory Coast, Malaysia, Mexico, Nigeria, Paraguay, Peru, Thailand, and Indonesia.
- The coalition urges the EU to reconsider and revise the regulation through inclusive dialogue.
- Trade Negotiations Context:
- Indonesia is prioritizing the completion of the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA).
- Signs of EU flexibility on EUDR have emerged amid growing interest in long-term trade cooperation.
Strategic Insights:
The EUDR debate highlights a growing tension between environmental regulation and equitable trade practices. While the EU’s intent to curb deforestation is commendable, its unilateral enforcement risks sidelining the realities of developing economies. For countries like Indonesia—where palm oil, rubber, and timber are vital export sectors—the regulation could disrupt livelihoods, strain supply chains, and undermine progress toward sustainable development.
Indonesia’s diplomatic strategy reflects a shift toward collective advocacy. By aligning with 17 other nations, it amplifies the voice of the Global South in global regulatory discourse. This coalition challenges the notion that environmental standards can be imposed without regard for local contexts, regulatory capacity, or economic diversity. It also reinforces the importance of multilateralism in addressing transboundary challenges like deforestation.
The lack of clarity in EUDR’s implementation framework further complicates compliance. Ambiguities around definitions and risk classifications create uncertainty for exporters and regulators alike. Indonesia’s call to recognize national systems as credible compliance tools is a pragmatic solution—one that balances environmental integrity with operational feasibility.
The IEU-CEPA negotiations offer a critical opportunity to embed these concerns into a broader trade framework. If successful, the agreement could serve as a model for integrating sustainability with fairness, ensuring that environmental goals do not come at the expense of economic inclusion. The EU’s willingness to engage signals a potential shift toward more collaborative policymaking.
In the long term, the EUDR debate may reshape how global trade and environmental policy intersect. It underscores the need for adaptive governance—where standards are harmonized, local systems are respected, and shared goals are pursued through dialogue, not division. For Indonesia, this moment is not just about defending exports—it’s about asserting leadership in shaping a more just and sustainable global economy.