ASIATODAY.ID, JAKARTA – Indonesia and the European Union (EU) are entering a pivotal stage in finalizing the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA).
According to Indonesia’s Coordinating Minister for Economic Affairs, Airlangga Hartarto, the agreement is now more than 90% finalized, with both parties preparing for an official announcement by President Prabowo and the President of the EU in the near future.
“The IEU-CEPA negotiations have reached their final stage. Almost all key issues have been agreed upon by the chief negotiators and working groups. We’re now waiting for a joint announcement by President Prabowo and the President of the European Union,” said Airlangga at the IEU-CEPA Dissemination Forum in Jakarta, Friday, June 13, 2025.
The IEU-CEPA agreement is seen as a strategic milestone to expand Indonesia’s export access to the high-value EU market. In 2024, total trade between Indonesia and the EU reached USD 30.1 billion, with Indonesia’s trade surplus rising significantly from USD 2.5 billion in 2023 to USD 4.5 billion in 2024.
Key Indonesian exports to the EU include: Palm oil and its derivatives, Copper ore, Fatty acids (oleochemicals), Footwear and textiles, Iron and steel, Cocoa butter and copra, Canned fish, particularly tuna.
The EU has also expressed readiness to further open its market to Indonesia’s priority sectors such as fisheries, renewable energy, electric vehicles, and textile manufacturing.
According to research by CSIS (2021) and a Sustainability Impact Assessment by the European Commission (2020), IEU-CEPA could: Boost Indonesia’s GDP by 0.19%, Increase national income by USD 2.8 billion, Raise Indonesia’s exports by up to 57.76% within the next three years.
“If our exports rise by 50%, that would be equivalent to what Vietnam or Malaysia are achieving this year. Under IEU-CEPA, current tariffs of 8–12% on our key commodities could be reduced to 0%,” Airlangga explained.
Legal Process and Implementation Timeline
The final IEU-CEPA agreement is expected to be signed during the official visit of EU Commissioner for Trade Maroš Šefčovič to Indonesia in September 2025. Following the signing, the agreement will go through a ratification process by all 27 EU member states and the Indonesian parliament.
Minister Airlangga stressed the importance of domestic industrial preparedness to fully capitalize on the benefits of IEU-CEPA. The Indonesian government will prioritize cross-sectoral policy harmonization and a robust export ecosystem.
Unlike Vietnam and Singapore, which have already benefited from free trade agreements with the EU, Indonesia is on the verge of establishing its first major FTA with Europe through IEU-CEPA. The agreement is expected to significantly boost the global competitiveness of Indonesian products.
“IEU-CEPA represents more than a trade agreement—it’s a transformative step toward a long-term, strategic economic partnership between Indonesia and the European Union,” Airlangga concluded. (AT Network)
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