Indonesia and EU finalize negotiations on economic partnership agreement
The Coordinating Minister for Economic Affairs has announced that Indonesia and the European Union have finalized CEPA, the Comprehensive Economic Partnership Agreement, which took nine years and 19 rounds of negotiations.After meeting with the EU Commissioner for Trade and Economic Security, he confirmed that all remaining issues had been resolved and would be followed up with a report to the two leaders. The EU is Indonesia's fifth largest trading partner, with bilateral trade amounting to $30.1 billion in 2024, and Indonesia has a $4.5 billion trade surplus with the EU. Against the backdrop of global economic instability, the agreement is significant in strengthening cooperation between the two sides and stabilizing the global supply chain. 1-2 years after the implementation of the agreement, Indonesia 80% exports to the EU will enjoy zero tariffs, labor-intensive industries and palm oil, fisheries, renewable energy, electric vehicles and other industries benefit. The EU negotiation focuses on local content requirements, the automotive industry, access to key minerals and incentives for foreign investment; Indonesia seeks fair treatment for fisheries exports and the EU agrees to provide a level playing field. In addition, the EU has promised to give special consideration to Indonesia in its deforestation policy, which will facilitate the export of forest-related products.CEPA is expected to enhance Indonesia's global competitiveness, with exports to the EU expected to grow by more than 50% in the next 3-4 years, and to attract strategic investment from Europe and enhance international confidence in Indonesia's legal and business environment.