Jakarta Globe is reporting that Indonesia and the European Union have finalized negotiations on the long-anticipated Comprehensive Economic Partnership Agreement (CEPA), a landmark trade pact aimed at expanding market access and deepening bilateral economic cooperation, Coordinating Minister for Economic Affairs Airlangga Hartarto announced on Saturday (7/6/25.)
The conclusion marks the end of a nine-year negotiation process involving 19 intense rounds of talks. Speaking in a video press conference from Brussels, Airlangga confirmed that all remaining issues have been resolved and both sides are ready to move forward.
“Negotiations have officially concluded, with several technical issues settled in the final round at the Chief Negotiators’ level,” Airlangga said. “The Indonesian government remains firmly committed to finalizing trade agreements with key strategic partners to open markets, enhance trade and investment, and reduce both tariff and non-tariff barriers.”
Jakarta Globe says the announcement followed Airlangga’s meeting with European Commissioner for Trade and Economic Security Maroš Šefčovič in Brussels on Friday (6/6/25.) The final outcome of the negotiations will soon be reported to President Prabowo Subianto and European Commission President Ursula von der Leyen.
The EU is Indonesia’s fifth-largest trading partner, with bilateral trade reaching USD 30.1 billion in 2024. Indonesia recorded a USD 4.5 billion trade surplus with the bloc last year.
Airlangga stressed the strategic importance of the deal at a time of heightened global uncertainty. “Indonesia and the EU recognize this as a critical moment. Our major commodities complement rather than compete with one another. By finalizing this agreement, we can jointly strengthen global supply chains.”
One of the agreement’s main benefits is the substantial elimination of import tariffs, says Jakarta Globe, adding that within one to two years of implementation, 80 percent of Indonesia’s exports to the EU will enjoy zero tariffs. Labor-intensive industries such as footwear, textiles, and garments, along with palm oil, fisheries, renewable energy, and electric vehicles, are expected to receive fairer preferential treatment.
The EU, meanwhile, raised several issues during the negotiations, including local content requirements (TKDN), the automotive sector, access to critical minerals, and incentives for foreign investors.
Indonesia also pushed for fair treatment of its fishery exports, requesting the EU to align its policies with those extended to other ASEAN nations like Thailand and the Philippines. According to Airlangga, the EU has agreed to provide a level playing field for Indonesia’s fishery products, says Jakarta Globe.
Regarding the EU’s deforestation policy, Commissioner Šefčovič assured that special consideration would be given to Indonesia, an assurance Airlangga said would benefit Indonesia’s forest-based exports.
The CEPA is expected to significantly boost Indonesia’s global competitiveness by improving access to the European market and eliminating key trade barriers. The Indonesian government projects that exports to the EU could rise by more than 50 percent over the next three to four years. The deal is also seen as a catalyst for attracting greater strategic investment from Europe, reinforcing international confidence in Indonesia’s legal and business environment.
Source: Jakarta Globe
Stock photo by Antoine Schibler on Unsplash
