Author: Daniel Situmeang
President Prabowo Subianto speaks in a joint news conference with European Commission President Ursula von der Leyen at the EU headquarters in Brussels, Belgium, Sunday, July 13, 2025. Photo by the Presidential Secretariat from Jakartaglobe.id
Since the mid-20th century, many developing countries have been freed from the shackles of European colonial rule. Indonesia itself has been recognized as an independent state by the Netherlands since 1949. However, nearly eight decades after that event, the shadow of colonialism still haunts in the form of European Union (EU) trade policies, which have recently become increasingly protectionist against non-European products, including Indonesian ones. Indonesia is not standing idly by and is fighting back.
The discrimination of EU trade laws
In 2019, Indonesia initiated a dispute with the EU at the World Trade Organization’s Dispute Settlement Body (WTO DSB) over the implementation of Renewable Energy Directive II (RED II), which categorizes palm oil biofuel, one of Indonesia’s most significant exports to the EU, as a high-ILUC-risk commodity due to its association with mass deforestation (Heriani, 2025). Indonesia argued that the regulation was discriminatory because RED II did not apply to canola and sunflower oil products produced by the EU itself. Furthermore, the EU was deemed to have failed to review the data used to determine high-risk biofuels and to implement procedures for certifying low-ILUC-risk commodities. Consequently, the WTO DSB agreed with Indonesia’s arguments and ordered the EU to immediately evaluate the regulation. At the same time, the WTO’s DSB also ruled that Indonesia’s anti-dumping and countervailing duties on stainless steel products were inconsistent with WTO rules, particularly the Agreement on Subsidies and Countervailing Measures (Cicilia & Riswan, 2025). Unfortunately, the EU appealed the ruling, prolonging the dispute with Indonesia.
This dispute seems to demonstrate that the EU is paying little attention to, and even hindering, the efforts of developing countries to grow their economies. Indonesia is not the only developing country to have a trade dispute with the EU. Malaysia, Brazil, and Colombia are three of a number of countries experiencing the same fate. Although the EU asserts that its established rules are intended to protect consumers and encourage the implementation of ethical capitalism, it cannot be denied that, behind this narrative, there are hidden motivations to fulfill self-interests that are not only mercantilist but also colonial in nature (Israel, 2025). This controversial observation is too realistic to be dismissed as mere opinion.
A form of neo-colonialism?
Despite the EU’s attempts to dismiss these arguments, there is ample evidence to the contrary. First, EU trade regulations, such as RED II, which purportedly “protect environmental sustainability,” force developing countries to adopt EU environmental standards that are difficult to implement due to their limited economic and technological capabilities. While the EU has developed large-scale green technologies and has an integrated environmental policy, Indonesia still relies heavily on fossil fuels. Complicated requirements, expensive certification processes, and ambiguous legal definitions also hinder developing country industries from accessing the EU single market. Furthermore, differing principles also hinder the equivalence of environmental standards. For example, when the EU asserts that there is no sustainable palm oil on the market, Indonesia claims that palm oil is the most sustainable alternative (Hinkes in Kinseng et al., 2022). These two cases highlight the biased and ‘Eurocentric’ nature of EU trade requirements for Indonesia. In this situation, the EU clearly believes that its standards are far superior to those of Indonesia and other developing countries.
Secondly, at the same time, the process of economic liberalization in developing countries paved the way for renowned European products and industries to dominate, generally at the expense of local industries. From automotive (Volkswagen and BMW) to fashion (H&M and Zara), European products have long dominated the Indonesian market. Meanwhile, Indonesian products, such as biodiesel and palm oil, are banned from entering the European market.
“In Indonesia, local products are not necessarily traded as much as European products, let alone exported to Europe.
Hence, it can be concluded that there is an unequal power relationship between the EU and Indonesia caused by the double standards of EU protectionism. It seems that the EU is looking for a way to balance the need to protect its regional industries from foreign competition with the continued ambition to reap abundant profits from its former colonies. In his book entitled “Neo-Colonialism: The Last Stage of Imperialism,” Kwame Nkrumah (1965) emphasized that colonial nations still seek to control their former colonies by influencing economic, monetary, and cultural aspects with the aim of creating dependency on their former colonizers. This view has proven accurate, at least in the case of Indonesia. The fact that Indonesia has repeatedly sued the EU at the WTO demonstrates that exports of national products to Europe, such as palm oil and stainless steel, are highly valuable (€17.5 billion in 2024) to Indonesia, making it powerless to implement policy changes or find alternative export destinations (Amrin, 2025). This observation is certainly in line with the structuralist perspective that explains how core countries, including European countries, use protectionist policies to advance their ambitions and maintain their power relative to developing countries.
Dilemma between two choices
The EU has changed. What began as a free and competitive trade project has evolved into a system that suppresses competition, stifles innovation, alienates trading partners, and perpetuates a culture of colonialism. This trend must be halted. Otherwise, the EU will inevitably enter a downward spiral that will weaken its competitiveness and image in international trade. Thus, the EU has only two choices: maintain excessive protectionist policies, potentially facing resistance from other countries, or return to the EU’s original vision of an open and inclusive market, allowing Indonesia and other countries access, investment, and fair competition with European industries. For the author, the second option is now clear.
The EU has recently demonstrated a shift in its policy direction by agreeing to the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU CEPA), a partnership agreement aimed at facilitating investment, trade, and technology transfer for both parties. This is commendable given the increasingly tense global trade situation, particularly following the imposition of high tariffs by the United States government. However, the EU remains steadfast in its environmental policy by appealing the WTO ruling. This further reveals that the EU is still far from being ‘anti-colonial.’
In his speech to the European Parliament, Jacques Delors, President of the European Commission (1985-1995) and architect of the modern European Union, outlined three visions that underpinned the organization’s founding: stimulating competition, strengthening cooperation, and uniting solidarity. In the coming years, everyone will ask: Will this vision remain intact, or will it become meaningless jargon?
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