🇮🇩🤝🇪🇺 Indonesia and the EU Seal CEPA Deal
Tariffs removed, promises made. What next for both party?
Bali, Indonesia — Indonesia and the European Union have officially signed the Comprehensive Economic Partnership Agreement (IEU-CEPA) in Bali 🇮🇩🌴 (Sept 23–24, 2025), ending 13+ years of negotiations.
The signing was accompanied by a bilateral meeting between Coordinating Minister for Economic Affairs Airlangga Hartarto and EU Commissioner for Trade and Economic Security Maroš Šefčovič.
🟢 The Main Takeaway
The agreement clears the way for 80% of Indonesia’s exports to the EU, including palm oil, textiles, footwear, and fisheries to enjoy zero tariffs once the deal takes effect. Both sides also highlighted the need for early business-to-business engagement and SME participation before full ratification, which Indonesia expects by January 2027.
“Key issues related to market access, tariffs, investment services, and trade facilitation have been covered in the negotiations. I hope the ratification and implementation processes can be completed swiftly so that the benefits can be shared by all,” (Airlangga Hartarto, Indonesia’s Coordinating Minister for Economic Affairs)
“European businesses warmly welcome the rapid progress achieved and have expressed strong interest in investing in Indonesia,” (Maroš Šefčovič, European Commissioner for Trade and Economic Security.)
🔑 Why it Matters
For Indonesia, CEPA promises stronger market access and new space for SMEs and young entrepreneurs, particularly in digital trade and logistics. 🚀
For the EU, it secures access to Indonesia’s critical raw materials needed for the green transition. ♻️🔋
Both parties stressed digital cooperation (e-logistics, e-government, e-payment), linking CEPA to ASEAN’s Digital Economy Framework Agreement. 🌐📡
🌏 The Big Picture
The deal is positioned as part of a strategic partnership.
Airlangga emphasized that CEPA must deliver tangible differences for SMEs, echoing concerns that past trade deals often benefited only large firms.
Šefčovič acknowledged this, noting that 99% of EU companies are SMEs, giving both sides a shared interest.
The EU also reaffirmed its full support for Indonesia’s OECD accession, framing CEPA as a broader political commitment beyond trade. 🌟📈
📍 Regional Stakes
With CEPA, Indonesia joins 🇻🇳 Vietnam & 🇸🇬 Singapore in having preferential EU access, sharpening competition in ASEAN. 🔥
The agreement could spur 🇲🇾 Malaysia & 🇹🇭 Thailand to accelerate their own EU negotiations.
For Brussels, CEPA signals an intent to deepen engagement in Southeast Asia through a Team Europe approach and Global Gateway projects. 🌐⚡
🏠 Why This Hits Home
Indonesian SMEs 🏭✨ may gain new export opportunities, but EU regulations remain a hurdle, especially the Deforestation Regulation (EUDR) 🌳🚫. While its enforcement has been delayed, Jakarta continues to push for further postponement until 2028.
Young entrepreneurs are being urged to seize CEPA’s digital opportunities, though compliance costs could limit smaller players. 👩💻👨💻
EU’s introduction of visa cascade schemes 🛂 and BKPM’s EU Desk 🏢 are small but tangible steps that could make doing business easier.
📌 Bottom Line
The IEU-CEPA represents a breakthrough in Indonesia–EU relations, linking trade to digitalization, sustainability, and even OECD membership. But as Airlangga himself stressed, success will be measured not by signatures in Bali, but by whether SMEs, farmers, and small producers see real benefits once the agreement is in force. Until then, CEPA remains a promissory note with delivery still uncertain. 🌟
📚 Need More Angles?:
Kemenko Perekonomian RI Official Press Release (24 Sept 2025)
Reuters Indonesia, EU sign “substantive conclusion” of trade deal
EU News Businesses hail EU-Indonesia trade deal, call for faster talks with other ASEAN nations
BBC Indonesia dan Uni Eropa teken kesepakatan IEU-CEPA — Apa keuntungan yang didapat Indonesia?
CNBC Indonesia Eropa Bisa Hemat 600 Juta Euro dari Kesepakatan IEU-CEPA
(ARS/ELS)