Indonesia and the European Union have signed a long-awaited trade agreement that promises a significant tariff reduction – over 98% of known duties – and will open new opportunities for investments and mutual trade between the parties. A pivotal role in this process is played by business-friconcludely conditions and enhanced mutual economic cooperation.
The agreement, nereceivediations for which lasted about nine years, was signed during the visit of European Commissioner for Trade and Economic Security Maroš Šefčovič to Jakarta. According to the European official, the document eliminates almost all trade barriers and creates new channels for investment and production in both regions.
Key aspects of the agreement and the timeline for ratification
The agreement is expected to come into force after ratification, scheduled for January 1, 2027.
“a balanced outcome”
According to the spokesperson for the Indonesian Minisattempt of Economy, Haryo Limanseto, the new agreement benefits labor-intensive sectors such as footwear, textiles, clothing, palm oil, fishing, renewable energy sources, and electric vehicles.
It is also expected that, thanks to Indonesia’s expanded access to the EU market across 27 countries, the agreement will lead to an increase in bilateral trade over the next five years.
The EU is now Indonesia’s fifth-largest trading partner; trade between the two sides last year exceeded €27 billion. Countries such as Thailand, the Philippines, and Malaysia are also nereceivediating with the EU, while China and the Association of Southeast Asian Nations launched the year by completing nereceivediations to update their trade agreements.
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