Indonesia–EU Trade Pact Expected to Boost Exports by Over 50 Percent
Jakarta, The Gulf Observer: Indonesia’s Coordinating Ministry for Economic Affairs has projected that the Indonesia–European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) will increase the country’s exports to the EU by more than 50 percent, officials said.
In a statement on Wednesday, the ministry’s secretary, Susiwijono Moegiarso, noted that once the agreement takes effect, it will have a significant impact on Indonesia’s trade with Europe. He emphasized that exports to the EU could rise substantially, supported by duty-free access for 98 percent of Indonesian products, including clothing and apparel, which currently face tariffs ranging from 7 to 15 percent.
The agreement is also expected to benefit agricultural commodities, such as bananas, which have long been subject to EU tariffs of up to 16 percent.
Indonesia and the EU concluded a decade-long negotiation process in July 2025, as announced by President Prabowo Subianto and European Commission President Ursula von der Leyen in Brussels. Trade Minister Budi Santoso earlier indicated that Indonesia plans to ratify the agreement in January 2026, marking a key step toward implementation.
The ministry has described the pact as a crucial instrument to help Indonesia achieve its target of 8 percent economic growth by 2029.
Ferry Irawan, deputy for coordination of state-owned enterprise management and development, highlighted that the agreement will expand EU market access for Indonesian products and offer multiple benefits, including tariff reductions for most exports. Under the pact, several commodities will receive zero-tariff treatment, including palm oil, coffee, cocoa, rubber, fishery products, timber and processed wood, textiles, and electronics.
Irawan added that the agreement is expected to increase national economic value and facilitate visa procedures, further strengthening economic and people-to-people ties between Indonesia and the European Union.
