Nusa Dua, Bali (ANTARA) - The Indonesian government and the European Union (EU) have signed the Indonesia–EU Comprehensive Economic Partnership Agreement (IEU-CEPA), aimed at boosting the labor market and supporting micro, small, and medium enterprises (MSMEs).
“We are targeting this agreement to take effect on January 1, 2027,” said Coordinating Minister for Economic Affairs Airlangga Hartarto after the signing ceremony on Tuesday.
The deal was signed with European Commission Commissioner for Trade and Economic Security Maros Sefcovic and witnessed by 21 EU ambassadors.
Hartarto explained that both parties’ parliaments must ratify the agreement before implementation. For the EU, the text will be translated into 27 languages before ratification by member states.
“This agreement benefits Indonesia by expanding exports and securing wider access to the European market,” he noted.
Baca juga: Government resolute to bridge gap between workforce and job market
Covering trade in goods, services, and investment, the agreement commits both sides to eliminate tariffs on more than 98 percent—and nearly 99 percent by import value—of traded goods.
“When it takes effect, Indonesian products will immediately enjoy zero percent tariffs on almost 90 percent of the EU market,” Hartarto said.
Baca juga: VP outlines three strategies for labor market overhaul
The government targets a 2.5-fold increase in Indonesian exports to the EU within five years of implementation, especially in labor-intensive sectors such as palm oil, coffee, textiles, fisheries, electronics, footwear, forestry products, and furniture.
The signing marks a historic milestone after negotiations that began in September 2016. The EU is already one of Indonesia’s top five investment sources, with bilateral trade valued at about US$30 billion and Indonesian exports at around US$13 billion. Within ASEAN, Indonesia becomes the third country—after Singapore and Vietnam—to finalize such a trade pact with the EU.
