Indonesia, EU conclude negotiations on free trade agreement

Indonesia and the EU on Tuesday finalized their negotiations on a comprehensive economic partnership agreement (CEPA) after nine years of talks.

The deal was signed in Bali by EU Commissioner for Trade and Economic Security Maros Sefcovic and Indonesia’s Coordinating Minister for Economic Affairs Airlangga Hartarto.

Speaking after the signing ceremony, Sefcovic stressed that by concluding this agreement, the EU and Indonesia have sent a strong message of unity in their commitment to open, rules-based, and win-win international trade.

The EU described the deal as comprehensive, advanced, and mutually advantageous, marking a turning point in its strategy to diversify partnerships and strengthen trade and investment ties with a major economy, while opening up new export opportunities and securing stable supply chains for energy and critical raw materials.

The CEPA is expected to deliver tangible benefits for both European farmers and businesses. Import tariffs on a wide range of agricultural products, food, automobiles, chemicals, and machinery will be reduced or eliminated, saving EU exporters an estimated EUR 600 million (over $708 million) annually.

In return, Indonesian consumers will gain greater access to high-quality European products at more affordable prices.

Beyond trade benefits, the agreement is also designed to promote sustainable development. Anchored in the Paris Agreement on climate change, the CEPA encourages investment in renewable energy and green technologies while establishing a framework for cooperation on environmental, climate, and agricultural issues.

It is seen as an opportunity to link economic development with social protection and effective environmental governance.

Following the signing, the EU and Indonesia will carry out legal review and translation into official languages. The agreement must then be ratified by EU member states, the European Parliament, and Indonesia. It is expected to take effect in 2027.

The conclusion of negotiations, which began in July 2016 with 19 formal rounds, marks a major step forward in the EU-Indonesia partnership, promising strong momentum for trade, investment, and sustainable development in the future.