00:00For Indonesia's textile industry, the pressure is on.
00:06This factory in Bandung on the island of Java is desperate for new markets and hopes to find them in Europe.
00:12Right now, this cotton linen is hit with EU tariffs as high as 8 percent.
00:18Cutting that to zero, the owner says, could save his business.
00:23The demand in Europe is there, but of course, we still have to meet their standards.
00:33Right now, we only export to Japan because they are willing to adjust to the conditions of its suppliers, like my factory.
00:46Since the US trade war, Indonesia has been flooded with cheap Chinese textiles
00:51that were once bound for the American market.
00:54So, with the domestic market already saturated, this deal with Europe is getting a lot of attention.
01:00The EU is one of Indonesia's largest trading partners, with bilateral trade worth about 30 billion US dollars last year.
01:08We definitely have very high hopes.
01:11I think if we look at the trade Indonesia and EU in the next five years, hopefully with this agreement,
01:20we can perhaps increase 30 to 50 percent even.
01:24That's really our hope that it will get there.
01:27The deal is expected to boost Indonesia's top exports to Europe, including palm oil.
01:32Under the EU's new deforestation law, palm oil can't be imported if it comes from recently cleared land.
01:39But the agreement is expected to give Indonesia some preferential treatment.
01:44Experts agree Donald Trump's tariff hikes sped up trade talks around the world.
01:49Vietnam and Singapore have already signed deals with Europe.
01:53Now, after nearly a decade of negotiations, Indonesia is the third Southeast Asian nation to do so.
01:59This agreement will definitely put us in the same level of playing field like Vietnam and other countries, right?
02:07Because Vietnam has earlier already a SIPA with EU.
02:12And it has, if you've seen the number, you know, not just trade, but investment has really picked up significantly.
02:18But market access or fresh investment for Durie Gumilar's company are still some way off.
02:24The deal needs approval from EU member states and both the European and Indonesian parliaments.
02:30If all goes well, it could take effect in about two years.
02:34It could take effect in about two years.
02:35It could take effect in about two years.
02:36It could take effect in about two years.
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