Indonesia and EU Sign Landmark Trade Deal After 10 Years of Negotiations

September 23, 2025 | 01:15 pm

TEMPO.CO, Jakarta - Indonesia and the European Union officially signed the Indonesia–European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) in Bali on Tuesday, September 23, 2025.

The signing was carried out by Indonesia’s Coordinating Minister for Economic Affairs Airlangga Hartarto and European Commission Commissioner for Trade and Economic Security Maroš Šefovi, in the presence of ambassadors from EU member states and representatives of the private sector.

“Today, we mark a significant milestone in the long-term partnership between Indonesia and the European Union. We welcome the substantive conclusion of the Comprehensive Economic Partnership negotiations,” Airlangga said at the ceremony.

The minister expressed his appreciation to Sefcovic, noting that the two sides have been negotiating intensively for the past two years, wrapping up discussions that had stretched for nearly a decade.

“Both parties wanted to finally conclude negotiations that have been ongoing for 10 years—an exceptionally lengthy process,” Airlangga remarked.

Airlangga said the agreement is targeted to take effect on January 1, 2027. In the interim, Indonesia will prioritize sectors that can be addressed more quickly, particularly labor-intensive industries.

“This includes textiles, footwear, apparel, and furniture, industries that currently employ around 5 million workers in Indonesia,” he said.

Sefcovic underlined that the agreement reflects the shared commitment of the EU and Indonesia to open, rule-based, and mutually beneficial international trade.

“The European Union and Indonesia have built a strong trade relationship. As the largest economy and consumer market in Southeast Asia, Indonesia is the EU’s fifth-largest trading partner in the region,” he said.

In 2024, EU exports to Indonesia reached nearly €9.7 billion, supporting more than 15,000 European SMEs and about 200,000 jobs across Europe. Šefovi said IEU-CEPA will unlock untapped potential and deliver tangible benefits for both economies.

“With the elimination of more than 98 percent of tariffs, the agreement will spur growth across key sectors, from palm oil, textiles, and footwear in Indonesia to the agri-food and automotive industries in Europe,” he explained.

The IEU-CEPA is regarded as a landmark step in strengthening economic ties between Indonesia and the European Union, aiming to expand market access, create jobs, and promote sustainable trade in both regions.

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