Nusa Dua, Bali. Indonesia’s exports to the European Union are projected to rise by up to 60 percent in the early phase of the Comprehensive Economic Partnership Agreement (CEPA), which is expected to take effect on January 1, 2027.

The deal was signed Tuesday in Bali by Coordinating Minister for Economic Affairs Airlangga Hartarto and European Commissioner for Trade and Economic Security Maroš Šefčovič, marking the conclusion of nearly a decade of negotiations that began in July 2016.

“Indonesia’s industries, which currently employ around five million people, have promising prospects ahead as the market becomes significantly larger,” Airlangga said in a statement.

Tariff Cuts and Export Opportunities
CEPA will remove more than 98 percent of tariffs between the two sides, boosting the competitiveness of Indonesia’s leading exports -- including palm oil, coffee, textiles, footwear, and furniture -- in the European market. The agreement also opens the door for high-tech exports such as smartphones and telecommunications equipment, diversifying Indonesia’s export base and strengthening its industrial competitiveness.

The trade pact is expected to encourage investment, facilitate technology transfer, and deepen Indonesia-EU integration into global supply chains.

The EU is already one of Indonesia’s key economic partners. In 2024, bilateral trade totaled $30.4 billion, with Indonesia recording a $4.4 billion surplus. The EU also ranked as Indonesia’s fifth-largest investor between 2019 and 2024, with cumulative investment reaching $15.6 billion.

Airlangga stressed that the benefits of CEPA will extend beyond large corporations to small and medium enterprises. “When Indonesia and the EU work together to expand markets, I am confident we can bring significant growth not only to Europe but also to the Indo-Pacific region, where Indonesia is the largest economy in ASEAN,” he said.

He added that the agreement also covers a digital cluster, strengthening Indonesia’s position in the rapidly expanding digital economy. European technology and infrastructure support, he noted, will help maximize this potential.

European Perspective
European Commission President Ursula von der Leyen welcomed the deal, saying CEPA will deliver major benefits to EU farmers and industries by reducing tariffs on agri-food products, protecting traditional European goods, and boosting sectors such as automotive, chemicals, and machinery.

She said EU exporters will save about €600 million annually in duties, making European products more affordable and accessible for Indonesian consumers.

“We have made a commitment to double down on diversification and partnerships, to further support EU jobs and boost growth. Our deal with Indonesia creates new opportunities for businesses and farmers in a major and growing economy. This also provides us with a stable and predictable supply of critical raw materials, essential for Europe’s clean tech and steel industry,” von der Leyen said.

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