Indonesia and the European Union are approaching the finalization of a trade agreement, the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA).
Indonesia’s Coordinating Minister for Economic Affairs, Airlangga Hartarto, confirmed the progress on Saturday, following discussions with European Union Commissioner for Trade and Economic Security, Maroš Šefčovič, in Brussels on Friday.
“The IEU-CEPA agreement has reached its final stage after nine years of negotiations. This marks an important milestone amid unpredictable and uncertain global economic conditions. It highlights the significance of cooperation in addressing global challenges,” Hartarto stated.
Hartarto noted that Indonesia and the European Union have committed to addressing the remaining issues and are prepared to declare the substantive conclusion of negotiations by the end of June 2025. However, he did not disclose specific details about the agreements already reached. He indicated that Jakarta is urging the EU to provide preferential access to its fishery products, similar to the benefits already extended to other partner countries by the bloc.
The European Union stands as Indonesia’s fifth-largest trading partner, yet negotiations have encountered hurdles. Chief among them are EU regulations on deforestation-linked products, which pose a risk to Indonesia’s palm oil exports, a vital industry for the nation. Moreover, Jakarta’s ban on raw mineral exports has added further complexity to the ongoing discussions.
In recent months, the Indonesian government has expedited talks with multiple trading partners to broaden its export destinations, particularly in response to challenges stemming from U.S. tariffs.
In 2024, bilateral trade between Indonesia and the European Union totaled US$30.1 billion, with Jakarta recording a surplus of US$4.5 billion, up from US$2.5 billion the previous year.
Negotiations on the IEU-CEPA commenced in 2016 but experienced setbacks due to regulatory and environmental concerns. Once finalized, the agreement will enhance economic cooperation and foster stronger trade relations between the two parties.
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