Europe, we know, is abandoning increasingly important parts of the Green Deal. Partly because of external imposition, partly because of pressure from European populists and sovereignists/patriots, and partly because many think that sometimes playing dumb and reducing protections and safeguards for the environment pays off. And so, amid general inattention, in recent weeks the European Commission closed negotiations with Indonesia on a comprehensive free trade agreement and, almost in parallel, proposed postponing the anti-deforestation regulation for another year. Two moves that tell the phase: expanding markets to offset tariffs and geopolitical tensions, while the Green Deal slips into the background.
In Brussels, the “Comprehensive Economic Partnership Agreement” (CEPA) between the EU and Indonesia is presented as a step change. After the agreement with Mercosur and the revision of the one with Mexico, another booming economy enters the large network of trade agreements that von der Leyen wants to create to allow European exporters to find new markets and offset losses due to Trump’s tariffs.
ASEAN’s largest economy
Indonesia is a market of 286 million people with economic growth around 5 per cent. It is the largest economy in ASEAN (Association of South-East Asian Nations), but it is only the EU’s fifth largest trading partner in the region. In 2024, trade exceeded 27 billion euros. Trade Commissioner Maros Šefčovič explained that because of Indonesian tariffs there is “huge untapped potential.”
Europe thus aims to drastically reduce barriers. Tariffs on cars, now at 50 per cent, will drop to zero in five years; for chemicals (25 per cent) and machinery and pharmaceuticals (15 per cent) similar liberalisation is planned. In agribusiness, the list is long: dairy, meats, fruits and vegetables and many processed goods produced in Europe will enter the Asian archipelago more easily. In total, 98.5 per cent of Indonesian tariffs will be eliminated, saving European exporters an estimated 600 million euros.
The CEPA also includes an investment agreement, which is expected to open the market for IT and telecommunications services and improve conditions for European investors to access raw materials needed for digital and climate transitions. For the Commission, it is about weaving a European version of “happy globalisation” in an era marked by US tariffs and Chinese competition.
And it doesn’t end there. The EU has announced that it will once again delay the entry into force of the Eu Deforestation Regulation (EUDR), the regulation banning the import of commodities linked to forest destruction. The text would force importers of palm oil, coffee, cocoa, cattle, timber and rubber to prove that these products were not produced on deforested land in order to be sold on the EU market. According to a letter attributed to Environment Commissioner Jessika Roswall, the one-year postponement would serve to adapt the computer systems that will have to handle the volume of traceability data. The deadlines today call for implementation from 30 December 2025 for large companies and 30 June 2026 for SMEs; slipping it would move the whole timetable further down the road, with a mandatory passage through the European Parliament and Council.
Late last year, Brussels had already postponed the entry into force of this regulation for a year. But that decision had not quelled opposition from industrial and trading partners such as Brazil, Indonesia and the United States, whose position is clear: complying with the regulations would be costly and hurt their exports to Europe.
The regulation opposed
The regulation is one of the building blocks of the Green Deal, and is opposed by several trading partners who see it as protectionist, fearing the exclusion of millions of small farmers from the European market. Opposition is not limited to third countries: Poland and Austria complain of difficulties on traceability for EU producers as well. In the European Parliament, negotiator Christine Schneider argues that the problems are structural and cannot be solved by further transitions or guidelines, reintroducing the idea of a “zero risk” category that would exempt some countries from the obligations—hypothesis so far rejected by the Commission and Council.
Environmental organisations criticise the choice. Every month of delay means new deforested areas, fires and extreme phenomena. WWF recalls that nearly 200,000 European citizens have called for keeping nature laws intact and warns of the risk of further weakening with global consequences for forests.
In Asia, those who fear the effects of the squeeze welcome the postponement. The Malaysian Palm Oil Council called the EU proposal “key” to addressing critical implementation and operational and structural gaps in the regulation. Malaysia, amongst the world’s largest producers, also disputes the EU’s classification as a “standard risk country,” which entails inspecting 3 per cent of shipments, which is more stringent than for “low-risk” countries. The industry claims it has invested to comply, without seeing proportionate recognition of more responsible practices.
