After nearly a decade of negotiations, Indonesia and the European Union have finalised a Comprehensive Economic Partnership Agreement (CEPA).
The agreement was officially concluded on 23 September 2025 in Bali during a meeting between Indonesia’s Coordinating Minister for Economic Affairs, Airlangga Hartarto, and EU Trade Commissioner Maroš Šefčovič.
Under the deal, Indonesia will gain tariff-free access for 80 per cent of its exports into the EU, including key items such as palm oil, fisheries, and textiles. In return, more than 90 per cent of EU goods entering Indonesia are to see reduced import duties.
Bilateral trade between Indonesia and the EU stood at approximately $30.1 billion in 2024, and the agreement is expected to nearly double that figure within the first five years once the pact enters into force.
The implementation date is set for 1 January 2027, subject to formal ratification and legal processes.
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EU exporters are forecast to benefit from savings of around €600 million ($707 million) annually in duties, particularly in sectors such as machinery, automobiles, and chemicals.
Indonesia, on its part, expects growth in exports of palm oil, coffee, textiles, and clothing.
Negotiations on the agreement had begun in 2016 and had faced several points of contention, including regulations related to deforestation, nickel export policy, and non‑tariff barriers.
These issues were addressed sufficiently to allow the partnership to be finalised.
The agreement will still require the approval of the European Parliament and EU member states, as well as the Indonesian Parliament. Only after these legal steps will the CEPA become fully operational.
