BALI, INDONESIA – September 23, 2025 – A new era of economic cooperation has dawned as Indonesia and the European Union officially signed the Comprehensive Economic Partnership Agreement (IEU-CEPA) in Bali. This landmark accord, the result of nearly a decade of negotiations, aims to foster an economic relationship built on openness, fairness, and sustainability.
The IEU-CEPA will significantly boost trade and investment by eliminating tariffs on over 98 percent of tariff types, covering approximately 99 percent of their total import value. Projections indicate a substantial increase in Indonesian exports to the EU, potentially by up to 60 percent in the initial stages of implementation. The agreement is also expected to contribute approximately $2.8 billion to Indonesia's national income, fostering job creation and economic growth.
The signing ceremony was attended by key figures, including Indonesia's Coordinating Minister for Economic Affairs, Airlangga Hartarto, and European Commissioner for Trade and Economic Security, Maroš Šefčovič. Minister Hartarto described the agreement as a historic milestone, emphasizing a shared commitment to a robust economic partnership. Commissioner Šefčovič echoed these sentiments, commending Indonesia's leadership in bringing the agreement to fruition.
The IEU-CEPA is poised to unlock new investment opportunities in strategic sectors such as electric vehicles, electronics, and pharmaceuticals, areas where the EU has expressed significant interest in Indonesia's potential. This agreement solidifies Indonesia's position as a pivotal economic partner in Southeast Asia amidst evolving global economic dynamics.
This partnership marks the third comprehensive trade deal the EU has established with a Southeast Asian nation, following similar agreements with Singapore and Vietnam. The IEU-CEPA is anticipated to officially take effect by January 1, 2027, pending ratification by both parties' legislative bodies. The EU is Indonesia's fifth-largest trading partner, with bilateral trade reaching $30.1 billion in the previous year, highlighting the existing economic ties that this agreement is set to deepen.
Beyond tariff reductions, the IEU-CEPA encompasses provisions for digital trade and the integration of supply chains for raw materials. It also includes a commitment to high environmental and social standards, aligning with global sustainability objectives, and fosters cooperation in renewable energy and green technologies.