The European Union and Indonesia, the world’s fourth-most populous nation, have finalized a long-awaited Comprehensive Economic Partnership Agreement (CEPA). This landmark deal, nine years in the making, will open new trade avenues and enhance the EU’s access to critical raw materials.
Key Agreement Provisions
Tariff Elimination
The agreement abolishes import tariffs on nearly all European exports, covering 98.5% of tariff lines. The European Commission estimates this will save EU exporters €600 million annually in duties on vehicles, machinery, chemicals, and pharmaceuticals.
Access to Raw Materials
The CEPA ensures stable supplies of raw materials for the EU, vital for developing clean technologies and supporting its steel industry.
Product Protection
CEPA protects 221 European food products under Geographical Indications (GIs), including renowned items like Roquefort cheese and Lübeck marzipan.
Agriculture
Indonesia will gain duty-free access for palm oil exports to the EU, subject to established quotas. Crucially, the agreement includes legally binding provisions on sustainable development.
Geopolitical Context and Next Steps
The conclusion of this deal reflects not only lengthy negotiations but also ongoing geopolitical shifts. Recent protectionist measures by the United States impacting both the EU and Indonesia have accelerated the process. Brussels is actively diversifying its trade relationships to bolster economic growth and job creation.
Despite reaching an agreement, the CEPA still requires approval from the Council and the European Parliament before it can officially enter into force.
