"This momentum, a new chapter in the I-EU CEPA, reflects both parties' commitment to creating a balanced, fair, and mutually beneficial partnership in the long run," he remarked in a statement issued on Thursday.
Santoso emphasized the need for Indonesia to build solid and progressive partnerships with leading partners to navigate the current dynamics of global trade.
Besides affirming Indonesia's strategic position in global trade, he stated that the agreement also serves as rules-based business certainty that will boost business confidence.
Djatmiko Bris Witjaksono, Director General of International Trade Negotiations, explained that the I-EU CEPA offers broad opportunities to diversify trade and reduce dependence on specific trading partners.
"This agreement also encourages increased production standards in Indonesia, which will boost competitiveness and opportunities for Indonesian products to expand into other global markets," he remarked.
Following the substantive settlement, both parties will undertake legal scrubbing and other domestic procedures, leading to the signing of the I-EU CEPA in 2026, followed by ratification in both parliaments. Both sides aim to implement the agreement in January 2027.
According to the statement, the agreement eliminates up to 98 percent of total tariffs, removes almost all barriers to trade in goods and services, and paves the way for investment.
This will be beneficial for key sectors in both parties, from palm oil, textiles, and footwear for Indonesia to food products, agriculture, automotive, and the chemical industry for the European Union (EU).
The agreement also provides deeper market access and certainty for Indonesian sectors to capitalize on the large EU market, particularly in labor-intensive industries such as manufacturing and agriculture.
The I-EU CEPA offers broad access for service providers in Indonesia and the EU, where Indonesian service providers and youth can seize opportunities to meet demand for professionals in Europe, such as legal advisors, IT specialists, nurses, and engineers.
Furthermore, the agreement is expected to create a conducive investment climate, encouraging inflows that support a green economy, especially in renewable energy, electric vehicles, and research-based industries including ICT, electronics, and pharmaceuticals.
Indonesia's total trade with the EU from January to July 2025 reached US$18 billion, an increase of 4.34 percent compared with the same period last year.
In 2024, total trade between both sides stood at US$30.40 billion, with Indonesia’s exports valued at US$17.40 billion and imports from the EU at US$13 billion.
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Translator: Resinta Sulistiyandari
Editor: Anton Santoso
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