Landmark Trade Deal: Indonesia and EU Forge Economic Future

The long-awaited comprehensive economic partnership agreement between Indonesia and the European Union has been finalized after nine years of negotiations, setting the stage for a significant boost in trade and investment. Aimed at eliminating import duties on 98.5% of EU products, the agreement simplifies procedures for entry of items including cars and food products, the EU confirmed.

For European exporters, the deal spells an annual savings of approximately 600 million euros in duties, averaging around 10% of current costs. Indonesian exports, including palm oil, textiles, and other products, are poised to benefit from zero tariffs in 90% of the EU market. Officials expect trade to double within five years of implementation.

As legal, translation, and ratification processes await, Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto set January 1, 2027, as the target date to bring the agreement into force. Further economic collaboration, especially regarding critical minerals and renewable energies, is anticipated as talks between Indonesia and European automakers continue on electric vehicle partnerships.