EU, Indonesia finalise free trade agreement
EU and Indonesia have on Tuesday concluded negotiations for a Comprehensive Economic Partnership Agreement (CEPA) and an Investment Protection Agreement (IPA), marking a major milestone in bilateral trade and investment ties. The agreements follow a political deal reached in July 2025 by European Commission President Ursula von der Leyen and Indonesian President Prabowo Subianto.
The CEPA will remove import duties on 98.5 per cent of tariff lines, simplify export procedures for EU goods, and allow full ownership for EU service providers in key sectors. It also opens strategic investment opportunities in electric vehicles, electronics, and pharmaceuticals while protecting intellectual property and geographical indications for 221 EU and 72 Indonesian agricultural products. EU exporters are expected to save around €600 million annually in duties.
The deal integrates sustainability commitments aligned with the Paris Agreement, promoting trade in renewable energy, low-carbon technologies, and responsible supply chains for critical raw materials. European farmers stand to benefit from expanded access to Indonesia’s market while sensitive products like rice, sugar, and bananas remain protected.
The agreements will undergo legal revisions and translation before being submitted to the European Council for approval, followed by the European Parliament and Indonesia’s ratification before entering into force. Notably, negotiations first began in 2016, with the final round completed in July 2024.
“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.” European Commission President, Ursula von der Leyen, said.
Attribution: Amwal Al Ghad English
Subediting: Y.Yasser