Indonesia’s Labor-Intensive Industries Gear Up for EU Market as IEU-CEPA Nears Completion

JAKARTA, Investortrust.id — Indonesia’s business community has welcomed the completion of negotiations on the Indonesia–European Union Comprehensive Economic Partnership Agreement (IEU-CEPA), calling it a breakthrough that could unlock significant export opportunities in the EU’s $6.6 trillion import market.

Chairwoman of the Indonesian Employers Association (Apindo) Shinta Widjaja Kamdani said the agreement’s finalization provides new momentum for labor-intensive sectors to gain a stronger foothold in the European Union.

“This is very encouraging news for Indonesian businesses. The fact that we’ve reached clarity on the IEU-CEPA talks is a breath of fresh air for our labor-intensive industries,” Shinta told Investortrust on Monday, July 14, 2025.

The IEU-CEPA, a free trade agreement between Indonesia and the European Union, is expected to come into force by late 2026 or 2027. However, Shinta emphasized that the transition period offers a valuable window for domestic businesses to build capacity and position themselves for immediate advantage once the deal is enacted.

“This transition phase is a strategic moment. It’s the time to lay the groundwork so that the benefits of IEU-CEPA can be maximized from day one,” she said.

She urged companies in key labor-intensive sectors—such as textiles and textile products (TPT), footwear, furniture, and fisheries—to begin preparations to capitalize on enhanced market access.

Apindo, she added, will work closely with the government to raise awareness and distribute information to exporters. The organization also plans to help boost industry competitiveness, especially against countries like Vietnam that already enjoy preferential access to the EU.

“Even though the agreement has yet to be implemented, the business sector is ready,” she stated.

Strategic Opportunity in a $6.6 Trillion Market

Trade Minister Budi Santoso echoed the optimism, saying IEU-CEPA would provide Indonesia with a vital alternative for export diversification.

Speaking in a presidential secretariat broadcast, Budi noted the scale of the opportunity: “The EU imports around $6.6 trillion worth of goods from around the world. That’s a huge potential market for Indonesian products.”

With the agreement finalized, the government expects domestic industries to adopt a more adaptive and competitive stance to ensure that the IEU-CEPA delivers real economic value once it comes into effect.