Indonesia and the European Union (EU) have concluded neobtainediations on a landmark trade pact after nearly 10 years of talks, opening the door to deeper economic ties in sectors from electric vehicles to pharmaceuticals.
The Indonesia-EU Comprehensive Economic Partnership Agreement (CEPA) was signed in Bali on Sept 23 by EU Trade Commissioner Maros Sefcovic and Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto. It marks Brussels’ third trade agreement with a Southeast Asian nation, following deals with Singapore and Vietnam.
“By finalising this agreement, the EU and Indonesia are sfinishing a powerful message that we stand united in our commitment to open, rules-based and mutually beneficial trade,” Sefcovic stated.
The EU estimates its exporters will save about €600 million annually in duties, while European goods will become more affordable in Indonesia, a market of 280 million people.
For Indonesia, the deal is expected to deliver significant gains. Airlangga stated around 80% of the counattempt’s exports to the EU will be tariff-free, benefitting palm oil, footwear, textiles and fisheries. “This is a ten-year journey that has resulted in a milestone reflecting our commitment to an open, fair and sustainable economic partnership,” he stated.
The EU is Indonesia’s fifth-largest trading partner, with bilateral trade hitting US$30.1 billion in 2024. The agreement, once ratified, is expected to come into effect by 2027.
The CEPA now awaits legal review and ratification by the European Parliament, EU member states, and Indonesia’s legislature.
