Jakarta. The geographical indication (GI) label is expected to sweeten Indonesian coconut sugar’s entry into the European market as both sides wait for their trade agreement to come into effect by January 2027.

GIs are distinctive signs used to identify a product whose quality, reputation, or other such characteristics relate to the place where it comes from. Indonesia, while bilateral trade figures still lag behind other ASEAN economies, recently had its GI tag for Kulon Progo coconut sugar officially certified by the European Union (EU). Kulon Progo is a regency in Yogyakarta where the agricultural commodity is grown.

“GIs are recognitions that certain products cannot be reproduced anywhere in the same way,” EU Ambassador to Indonesia Denis Chaibi said in Jakarta on Monday.

According to the diplomat, the label creates value for consumers as it boosts confidence that the GI-protected product has “guaranteed authenticity and specific qualities”. 

“Producers, too, gain competitive advantage [thanks to the GI tag] by marketing their product specifically. They have collective rights over the product name as long as they meet the requirement. By creating this value, the GIs can produce more volume, more jobs, and support the local economy,” Chaibi said.

The GI labeling for Kulon Progo coconut sugar came not long after Jakarta and the EU inked a substantive conclusion of its free trade agreement, dubbed the CEPA. The accord sees both sides agreeing to gradually remove over 98 percent of the tariffs, starting with 90.4 percent of Europe-bound Indonesian goods. Chaibi, however, did not confirm nor deny whether coconut sugar was among the commodities that would immediately enjoy zero tariffs right away. The accord still has to undergo some lawmaking processes before it can enter into force.

Hermansyah Siregar, a director at the Legal Affairs Ministry, revealed to the press that the GI would mean Indonesia could sell its products at a higher price. He said: “For instance, the price tag of a GI-labeled Kulon Progo coconut sugar can rise from Rp 18,000 [$1.08] to Rp 24,000 [$1.44].”

According to the World Intellectual Property Organization (WIPO), GI-protected products sell for more than double the price of comparable products that do not have such labels.

The EU has certified Indonesia’s GI tags for Gayo Arabica coffee, Bali Amed salt, and Muntok white pepper.

The government reported that Indonesia-EU trade amounted to $30.4 billion throughout last year, with the Southeast Asian nation registering a $4.4 billion surplus. Trade numbers are expected to more than double in about four to five years since the deal’s implementation.