Country Paper: Indonesia

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RTAs and The Environment Internalizing the
Externalities at Regional Level by LAKSMI
DHEWANTHI Ministry of Environment, Indonesia
Tokyo , 19-20 June 2007
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Key points

• Background
• What are the main environmental issues in the
  region?
• Can trade internalize the externalities?
• Efforts at Regional level
• Closing Remarks

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Background

• Trade has the potential to stimulate economic,
  social and environment. Yet, to ensure that this
  trade is environmentally sustainable is a major
  challenge
• In this regard, it is necessary to ensure that
  trade liberalization does not have a negative
  impact on the environment, and that economic
  growth is environmentally sustainable
• Increase negotiation on and discussion of trade
  and environmental issues ? increased the
  challenges confronting developing countries as
  they attempt to formulate coherent trade and
  environment policies.

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Indonesia
Over-exploitation of Natural Resources and
Environment in the last 3 decades
trade contribute to better natural resources and
environment? or Weak environmental management
lowering competitive advantage in trade?
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What are the main environmental issues the
region?
Rice, pulp and paper, and palm oil are among
other key trade commodities, not only for
Indonesia, but for most of countries in the ASEAN
region

• ENVIRONMENTAL IMPACTS
• Increase in Land Conversion (land use shifting)
• Decrease chemical fertilizer/pesticides use
• Haze pollution
• Marine pollution
• Lost of biodiversity

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Can trade internalize the externalities?

• Current environmental condition is due to
  negative externalities of development
  activities, incl. trade.
• Isolating the impacts of trade from the impacts
  of other activities is difficult.
• Environmental impact is site and time specific,
  yet it also cumulative in nature
• ASEAN region regional environmental impacts and
  transboundary environmental impacts (haze, marine
  pollution, etc)
• ? by internalising environmental factors/ impacts
  into trade policy measurements

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Efforts at regional level

• No specific references of environmental
  measurement within RTAs. Yet it has always been
  aimed at fostering regional peace and stability
  (incl. environment)
• Development of testing and certification and
  development of regional infrastructure
• Regional cooperation on RD, and exchange of
  information on traditional and environmentally
  preferable production methods suitable for local
  condition

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Efforts. (2)

• Development of regional strategies for improving
  sustainable trade, including through
  strengthening south-south trade
• WG-MEAs, a forum to provide extentisive discuss
  implementation and development of MEAs
• ?Haze pollution, Biodiversity, Climate Change,
  hazardous waste, POPs, etc

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ASEAN WG- MEA

• dialogue among member countries on implementation
  of MEAs, icl. Conventions Basel, Rotterdam,
  Stockholm, Climate Change, etc.
• Raise awareness and build the capacity of all
  stakeholder, i.e. information exchange and
  dissemination, transfer of knowledge/ technology,
  training/workshop, and incentive/financing
  mechanism.

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Benefits

• Having regional efforts allow country to address,
  both, regional and transboundary environmental
  impact
• Reducing negative impacts by internalizing the
  externalities into regional policy framework ?
  accelerating internal/ national environmental
  policy processes
• Enhancing MEAs implementation, especially through
  joint efforts, capacity building, financing
  mechanism, dll.

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Closing remarks

• Trade relating to Environment Issues is only one
  side of the coin, in order to achieve and to
  ensure a win-win-win situation ? it is need to
  internalizing environmental impacts into policy
  making process at all levels
• MEAs as a multilateral poicy framework could be
  support by regional comittment and efforts.
• Regional efforts on internalizing the
  externalities would able to address environmental
  impacts resulting from trade. Yet the capacity
  building and technical assistance must result
  into reasonable costs.

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• Thank you