EU, Indonesia Seal Historic Trade Deal, Opening Market of 700 Million
The EU and Indonesia have sealed a Comprehensive Economic Partnership Agreement (CEPA) and an Investment Protection Agreement (IPA), opening up significant market access for EU companies. The deal, finalised after years of negotiations, promises to create a free trade zone of over 700 million consumers, based on transparency and predictability.
The CEPA grants privileged market access to EU companies, particularly in sectors like agri-food products, finance, electronics, textiles, footwear, fisheries, forestry products, and furniture. This includes full ownership in key service sectors and new investment opportunities in strategic sectors such as electric vehicles and electronics. The agreement also covers trade in goods and services, focusing on tariff elimination for more than 98% of import value and enhancing transparency and non-discrimination in public procurement.
The CEPA has a strong sustainability pillar, integrating commitments on climate, environment, workers' rights, and enforceability. It protects 221 EU and 72 Indonesian agricultural and food geographical indications and maintains tariffs on sensitive agri-food products. The deal will also benefit key industrial sectors like automotive, chemicals, and machinery by removing import duties on 98.5% of tariff lines and simplifying export procedures. Furthermore, the CEPA strengthens predictable, reliable, and sustainable supply chains for critical raw materials, including reduced tariffs and environmental impact assessments.
The EU already exports €1 billion worth of agri-food products to Indonesia annually. The CEPA will significantly benefit European farmers by bringing down tariffs on these products and protecting traditional EU products, saving EU exporters €600 million a year in duties. The agreement also allows EU companies to safeguard their brand identity and reputation by protecting intellectual property such as trademarks. This deal is set to boost trade and investment between the EU and Indonesia, fostering economic growth and job creation on both sides.
