Jakarta. Indonesia’s trade with the European Union (EU) remains far below its potential despite the country being Southeast Asia’s largest economy and most populous nation, with EU Ambassador Denis Chaibi pointing to Vietnam’s roughly $80 billion trade relationship with the bloc as an illustration of what could be achieved.

“We are way below our potential,” Chaibi said in an interview with Jakarta Globe on Monday. “Indonesia is only the fifth trading partner in ASEAN for the EU. This is not normal because it is the [region’s] biggest country with the biggest population.”

Indonesia’s non-oil and gas exports to the European Union reached $19.28 billion in 2025, but Chaibi said the gap between Indonesia’s current trade with Europe and its potential was evident when compared with Vietnam.

“Just to give you an idea, the trade with Vietnam is about $80 billion,” he said, referring to total trade between the EU and Vietnam.

Chaibi said EU-Vietnam trade had expanded significantly following the implementation of their free trade agreement, underscoring the potential for the Indonesia-European Union Comprehensive Economic Partnership Agreement (CEPA) to deepen economic ties between Jakarta and Brussels.

The ambassador said the trade pact, which he expects to begin implementation in early 2027, would give Indonesia an opportunity to compete on a more level playing field with other ASEAN countries that already enjoy preferential access to the European market.

Singapore and Vietnam already have free trade agreements with the EU, while other Southeast Asian economies have preferential trade arrangements or are negotiating closer economic ties with the bloc.

However, Chaibi said an agreement alone would not automatically transform Indonesia-EU trade.

“The CEPA is not a silver bullet that's going to make us both immediately immensely rich and happy,” he said.

Instead, he described the agreement as a platform that could improve market access, eliminate tariffs and, more importantly, encourage businesses from both sides to invest in each other’s economies.

“If they invest in each other’s country, then they have a bigger incentive to trade,” Chaibi said.

He added that greater alignment with international standards would also be key to helping Indonesia integrate more deeply into global supply chains.

“Standards allow for global supply chain integration,” he said. “If we want bigger trade, we need to look at the global scene. And for that, standards are important.”

Indonesia and the EU are preparing to formally sign the CEPA in the coming months, with both sides expressing confidence that the agreement will be signed this year and begin taking effect in early 2027.

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