The successful economic integration of the European Union (EU) has had a significant impact on the economic, political, and social life of EU member states. Through economic integration, the EU has created sustainable peace among its member states. The EU’s success in creating a single market has increased freedom not only for its people, but also the flow of goods, services, and a single currency that makes their transactions easier (Ette, 2014).
The achievements of EU economic integration cannot only be seen from its internal impact. However, the success of EU economic integration has made the organization emerge as the most developed model of regional integration. This then triggered an increase in the EU’s multilateral and bilateral cooperation relations with other countries or regional organizations. Most of these cooperations are trade-oriented. Apart from taking the EU as an example, the aim is none other than to expand market access to each other.
Indonesia is one of the countries that cooperates with the European Union. The two parties established bilateral relations under the framework of the ASEAN Regional Integration Support from the European Union-Indonesia-Trade Support Facility (ARISE+ Indonesia), a cooperation platform in terms of trade facilitation (ARISE+ Indonesia, 2022). The program ran from 2014 to 2020 but was later extended, and is still ongoing. Under the ARISE+ Indonesia program, the European Union provided 15 million Euros in financial assistance, to improve Indonesia’s competitiveness and trade performance in global value chains (Gareta, 2019).
ARISE+ Indonesia cooperation prioritizes several aspects. First, trade and investment policy, which is related to efforts to strengthen Indonesia’s institutional capacity to coordinate and implement trade and investment policies. Second is trade facilitation which includes capacity building of stakeholders, and support in the implementation of WTO-TFA trade facilitation, as well as other matters related to broader trade facilitation.
The third priority is export-quality infrastructure. This relates to harmonizing procedures and rules between international standards and those in Indonesia, to improve Indonesia’s export competitiveness. The fourth is Geographical Indications, which relate to empowering small producers and improving Indonesia’s competitiveness through the promotion of geographical indications (ARISE+ Indonesia, 2023).
Talking about cooperation certainly cannot be separated from the interests to be achieved in the cooperation. This is the case with the ARISE+ Indonesia program which certainly contains the interests of the European Union and Indonesia. For Indonesia, the main interest is to increase competitiveness in trade and investment to achieve inclusive economic growth, integrated into the global market and sustainability, Indonesia certainly wants to create massive trade flows with the European Union (European Union, 2019).
In this regard, to improve its economic capabilities, Indonesia urgently needs contributions and assistance from the European Union as a regional organization that already has established economic capabilities. The EU itself is a quality service provider and the Indonesian economy is in dire need of quality services to drive growth. The EU is one of the main sources of investment in Indonesia. So with ARISE+ Indonesia, the government hopes to maintain and even increase EU investment in Indonesia.
Under ARISE+ Indonesia, the government also seeks that this cooperation can enable Indonesian export products to gain more open access to the EU market through reduced tariffs, reduced non-tariff barriers, and improved quality and competitiveness of these export products (Sella Panduarsa, 2019). This departs from the not optimal trade relations between the two parties considering that many Indonesian products still experience various obstacles when they want to enter the global market including the European Union (Yose Rizal et al. 2021). Thus, with the existence of ARISE + Indonesia, Indonesia hopes that regulations that have been hampering the trade process can become clearer and easier to comply with (CSIS Indonesia, 2021).
In addition, through this cooperation, Indonesia wants to promote its products that are classified as geographical indications (a sign indicating the region of origin of a product which due to geographical factors, natural factors, human factors, or a combination of both gives certain characteristics to the resulting product) to get facilitation in production, development, and other regulations that make it easier for these products to gain access to the global market, especially the European market.
ARISE+ Indonesia will enable the capacity building of farmers and Geographical Indication producer associations in managing the local Geographical Indication value chain, and provide opportunities for producers to increase their visibility in national and international markets through a structured approach (ARISE+ Indonesia, 2023).
So far, there have been several local commodities that have obtained Geographical Indication certificates and penetrated the global market, especially Europe through the facilitation of the ARISE+ Indonesia program. For example, Koerint ji cinnamon from Jambi, Gayo arabica coffee from Aceh, Bali Amed salt, East Luwu pepper, Kulon Progo coconut sugar, and others. In addition, the program has also increased the capacity of farming communities and geographical indication producer associations in various regions in terms of control implementation, production procedures, and product promotion and branding procedures (ARISE+Indonesia, 2023).
ARISE+ Indonesia also triggered better investment policy planning such as investment in electronics, and increased the capacity of Indonesian stakeholders in analyzing trade policies. Even though ARISE+ Indonesia, the government has successfully negotiated the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) as an effort by both parties to increase trade and investment (Pratomo & Evandio, 2023).
Another achievement is that awareness of the opportunities for MSMEs to engage in international trade has also increased after the cooperation. This is evidenced by our MSMEs engaged in textile products and halal food successfully entering 6 electronic markets in Spain, Hungary, France & and Germany (Tempo, 2022). This happened because ARISE+ Indonesia provided opportunities and support to domestic industries including SMEs that enabled them to participate in international trade.
The program also succeeded in creating equality by facilitating everyone to engage in international trade. Not surprisingly, data from the European Commission Directorate General of Trade, European Union, states that in recent years, there has been an increase in trade flows between Indonesia and the European Union, with almost all products traded experiencing a consistent increase (ARISE+ Indonesia, 2023).
The Indonesian Ministry of Trade mentions that it has worked with Padjadjaran University, with support from ARISE+ Indonesia, to develop an academic trade remedies module that will be used as teaching material by graduate-level teachers to enhance Indonesian knowledge of trade remedies and international trade policy and law (ARISE+ Indonesia, 2023).
ARISE+ Indonesia was also successful in terms of capacity building to subscribe to information on EU technical regulations being developed or revised in trade, and successfully created the INRAPEX Website which serves as the main communication tool between market surveillance authorities, and collects information on unsafe products and shares it with all provincial market surveillance authorities (ARISE+ Indonesia, 2023).
EU and Indonesia trade flows based on Harmonized System (HS) Codes 2019 – 2022 (Source : ARISE+ Indonesia)
It is important to note that the bilateral cooperation between the European Union and Indonesia through ARISE+ Indonesia is part of the economic integration efforts in ASEAN. For ASEAN, the EU is the second largest trading partner with approximately 450 million consumers, while ASEAN is the third largest trading partner for the EU with 650 million consumers in ASEAN (Kemlu RI, 2023). Therefore, the EU seeks to implement the successful economic integration it has achieved in its trade relations with ASEAN through various support programs.
Therefore, the EU provides support to ASEAN through the ASEAN Regional Integration Support from the European Union (ARISE) program. With funding of 22 million euros, the program ran from 2013 to 2016 and covered several components, namely, high-level capacity building, supporting the realization of the ASEAN single market and production base, and strengthening the capacity building of the ASEAN Secretariat in Jakarta (ARISE Plus Programme, 2023).
The program has worked well, creating significant work on Non-Tariff Measures and the ASEAN Trade Repository, creating the ASEAN Customs Transit System, establishing the ASEAN Risk Assessment Centre for Food Safety, developing policy guidelines on standards harmonization, supporting the development of the ASEAN Economic Community 2025 M&E Framework, and funding for additional professional staff at the ASEAN Secretariat (Imani Development, 2019).
The success of the ARISE program made the EU decide to continue its support for ASEAN in trade facilitation through the ARISE Plus (ARISE+) program. This step was taken as an effort to accelerate trade liberalization and economic integration in ASEAN. ARISE+ is a continuation program of ARISE (2013-2016), which will be conducted from 2017 to 2022. The goal is more or less the same as the previous ARISE, which is to expand the EU’s commitment to supporting ASEAN to achieve economic integration. (ARISE+ Program, 2023).
The success of ARISE and ARISE+, which provided much evidence of progress in terms of economic integration, led the European Union to take further steps to enhance and support ASEAN regional economic integration at the national level. As a result, the EU developed six bilateral ARISE Plus projects: ARISE+ Cambodia, ARISE+ Laos, ARISE+ Malaysia, ARISE+ Myanmar, ARISE+ Thailand, ARISE+ Philippines, and ARISE+ Indonesia.