The EU and Indonesia signed a long-awaited trade agreement on Tuesday that will remove tariffs on nearly all European exports to Southeast Asia’s largest economy and secure more stable access to critical raw materials.
The deal removes import duties on 98.5% of tariff lines and simplifies procedures for goods sent to Indonesia, which the Commission estimates would save EU exporters €600 million annually in levies on cars, machinery, chemicals, and pharmaceuticals.
The Comprehensive Economic Partnership Agreement (CEPA) also offers protections to 221 EU food products such as Roquefort cheese and Lübecker Marzipan.
Trade Commissioner Maroš Šefčovič will be joining Indonesian officials to announce the Comprehensive Economic Partnership Agreement (CEPA) in Denpasar, Bali’s capital city, after nine years of negotiations.
Indonesia, the world’s fourth most populous nation, is a key supplier of raw materials needed for Europe’s clean-tech and steel industries. The agreement also eliminates tariffs on agri-food exports, including dairy, meat, fruit, vegetables, and processed foods.
“We have made a commitment to double down on diversification and partnerships, to further support EU jobs and boost growth,” Commission President Ursula von der Leyen said. The pact “creates new opportunities for businesses and farmers in a major and growing economy.”
Under the deal, Indonesia will be able to export a certain amount of palm oil, long criticised as a driver of deforestation, tariff-free to Europe. However, it includes legally binding sustainability provisions enforceable through dispute settlement.
US President Donald Trump’s recent tariff measures on both Europe and Indonesia prompted an acceleration in negotiations. Brussels has been moving quickly to broaden its trade relationships amid geopolitical upheaval and Washington’s protectionist turn. This agreement comes on the heels of the EU launching the ratification of trade deals with Mercosur and Mexico.
It must still garner approval from the Council and the European Parliament. Indonesia has said it hopes the process will be fast-tracked.
(cz)
