IEU-CEPA: EU Exporters Eyeing to Save 600 Million Euros as Deal Inked with Indonesia

September 23, 2025 | 08:34 pm

TEMPO.CO, Jakarta - The Indonesian government and the European Union have reached an agreement on the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) in Bali on Tuesday, September 23, 2025. European Commissioner for Trade and Economic Security Maroš Šefovi said the EU will save over 600 million euros on import duties for goods shipped to Indonesia, as the agreement eliminates over 98 percent of tariffs, removes almost all trade barriers, and opens new pathways for investment.

Maroš said the IEU-CEPA was developed with full respect for the respective priorities of each country, ensuring a balanced outcome. He exemplified that the 15 percent import duty on cars in Indonesia would be phased out over five years, thus opening the door for EU automotive exports.

"EU exporters alone are estimated to save over 600 million euros in import duties for goods shipped to Indonesia," he said after the signing, adding that these funds could be reinvested for innovation, expansion, and job creation.

According to Maroš, the trade relationship between the EU and Indonesia is robust. In 2024, the trade in goods exceeded 27 billion euros, with Indonesia maintaining a surplus, while the EU leads in the trade of services, adding almost 9 billion euros. "European investments in Indonesia exceed 25 billion euros, demonstrating growing confidence and opportunities," he said.

He mentioned that Indonesia has only recently become the EU's fifth-largest trading partner within ASEAN, indicating significant untapped potential. He listed several key sectors in both countries that would benefit from this agreement, ranging from palm oil, textiles, and footwear in Indonesia to agri-food, automotive, and chemical industries in the EU.

Maroš maintained that the IEU-CEPA paves the way for closer cooperation in leading sectors, including electric vehicles, pharmaceuticals, and electronics, which are considered crucial for the future of both economies.

The IEU-CEPA is also seen to help ensure the supply of vital raw materials for green and digital technologies, promote investment in renewable energy, and uphold strong environmental and labor standards. Additionally, the IEU-CEPA facilitates digital trade, particularly benefiting small and medium enterprises.

Maroš said that the IEU-CEPA is sending signals that Indonesia and the EU opt for openness and partnership in the face of "protectionism and fragile supply chains."

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