In the midst of global economic dynamics that is still tinged with uncertainty, the Indonesian Government continues to strengthen economic cooperation with various strategic partners to expand market access, increase investment, and strengthen the global supply chain. One of these efforts is realized through the acceleration of the implementation of the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) which is now entering an important stage after the European Commission submitted a proposal for the signing and ratification (conclusion) of IEU-CEPA along with the Investment Protection Agreement (IPA) to the Council of the European Union (Council of the European Union).
"I think it's time for us to develop a free, fair, and positive trade relationship for both parties. President of the Republic of Indonesia Prabowo Subianto hopes that this can be a game changer for the global market. When Indonesia and the European Union work together to develop the market, I believe we can bring a significant growth scale to the European Union and the Indo-Pacific region, where Indonesia is the largest economy in ASEAN," said the Coordinating Minister for Economic Affairs Airlangga Hartarto.
The submission is an important milestone in the IEU-CEPA settlement process which has gone through a series of long negotiations. For the European Union, the two agreements are part of a strategy to diversify economic partnerships, strengthen trade and investment relations with global strategic partners, create new export opportunities, while increasing the resilience of energy and raw material supply chains.
As one of the countries with a population of around 280 million people and the largest economy in the Indo-Pacific region, Indonesia is seen as having a strategic role in strengthening economic cooperation with the European Union. IEU-CEPA and IPA are designed as a modern agreement that provides mutual benefits for the business world of both parties, while supporting the creation of a more open, transparent, and sustainable trade and investment climate.
Through the two agreements, the European Union removed import duties on 98.5% tariff items, simplified procedures for exporting various products to Indonesia, opening investment opportunities in strategic sectors such as electric vehicles, electronics, and pharmaceuticals, protecting intellectual property rights, as well as strengthening a more reliable supply chain through trade facilitation and export of critical raw materials.
For Indonesia, the implementation of IEU-CEPA is expected to further expand access to the national export market to the European Union, increase the competitiveness of Indonesian products, attract quality investment, and strengthen Indonesia's integration in the global value chain. This agreement is also expected to be a catalyst for increasing national industrial productivity, job creation, and inclusive and sustainable economic growth.
If approved by the European Union Council, IEU-CEPA and IPA will be submitted to the European Parliament for final approval before being passed and effective. On the other hand, the Indonesian Government also continues to carry out the ratification process according to the national mechanism so that the implementation of IEU-CEPA can run according to the target that has been set.
Previously, the Government of Indonesia and the European Union have completed the substance of the IEU-CEPA negotiations in 2025 and targeted the ratification process to be accelerated by the second semester of 2026 so that the implementation of the agreement can begin in early 2027. The completion of this stage at the European Union level is expected to accelerate the realization of a closer and mutually beneficial economic partnership between the two parties.
"We target the IEU-CEPA ratification process can be completed in the second semester of 2026 so that the implementation can begin in early 2027," concluded the Coordinating Minister Airlangga.
Source: https://www.ekon.go.id/publikasi/detail/7001/komisi-eropa-ajukan-ieu-cepa-dan-ipa-kepada-dewan-uni-eropa-langkah-strategis-menuju-implementasi-perjanjian-indonesia-uni-eropa