Airlangga Urges Kadin to Prepare for IEU-CEPA and Support 2026 Growth Strategy
Poin Penting
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JAKARTA, Investortrust.id — Coordinating Minister for Economic Affairs Airlangga Hartarto calls on the Indonesian Chamber of Commerce and Industry, or Kadin Indonesia, to prepare for the implementation of the Indonesia European Union Comprehensive Economic Partnership Agreement during the 2025 National Leadership Meeting in Jakarta on Monday, Dec 1, 2025, as the agreement promises zero tariffs for most Indonesian products and significant export expansion. He says the government expects the business community to help translate these commitments into higher income, job creation, and stronger industrial performance across 2026 while Indonesia and the European Union finalize the legal drafting phase of the pact.
Kadin Indonesia was asked to anticipate the surge in opportunities arising from IEU-CEPA, which eliminates tariffs on more than 98 percent of tariff lines and 99 percent of import value. Airlangga said 90.40 percent of Indonesian products would immediately enjoy zero tariffs in the European Union, covering palm oil, coffee, textiles, garments, footwear, and furniture. He added that the agreement also opened a path for more sophisticated exports such as smartphones and telecommunications equipment.
The minister said the government projected exports to the European Union to rise by up to 60 percent at the start of implementation, with national income increasing by $2.8 billion and direct benefits for around five million workers in labor intensive sectors. He added that the European Union committed to improve trade facilitation through simpler customs procedures and stronger institutional cooperation.
Airlangga emphasized that Kadin Indonesia should align with government programs to strengthen micro, small, and medium enterprises, including those in construction. He highlighted the government's funding support for housing programs worth Rp 130 trillion and said the business community must help accelerate sectoral expansion as domestic demand improved.
He noted that Indonesia's Manufacturing Purchasing Managers Index at 53.3 reflected expansionary conditions and rising confidence among industrial players. He described the shift in economic conditions by saying that 2024 was marked by headwinds, while 2026 could benefit from tailwinds. He called on industry to achieve growth above baseline assumptions to secure a stronger economic trajectory.
Airlangga also asked Kadin Indonesia to help the government mobilize nationwide spending to support economic momentum into year end and early 2026. He said the national shopping initiative targeted Rp 120 trillion in spending across transportation discounts, tourism events, and promotions at major convenience store chains. Online shopping events scheduled for Dec 10–16, 2025, were targeted to generate Rp 56 trillion in transactions, while an Indonesia only mall spending program from Dec 18, 2025, to Jan 4, 2026, aimed at Rp 30 trillion.
He said government spending for national priorities in 2026 would reach Rp 2,567.9 trillion from a total budget of Rp 3,842 trillion. He added that President Prabowo Subianto had also pushed for lower reciprocal tariffs with the United States, from 32 percent to 19 percent, to protect five million workers in the garment and furniture industries.
Airlangga said Kadin Indonesia could help supply digital talent at a time when the government needed 12 million skilled workers to strengthen the digital economy. He also urged Kadin Indonesia to support investment growth after realisation reached Rp 1,434 trillion or 75 percent of the Rp 1,900 trillion annual target as of September 2025. He described job creation as another responsibility that the business community must take on as part of national economic objectives.
The minister said the European Union Deforestation Free Regulation would not be implemented in 2026 but postponed to 2027 because Indonesia and the European Union were completing the final stage of IEU-CEPA. He said the postponement was a diplomatic achievement for Indonesia, which positioned itself as a like minded country leading improvements to the regulation.
He said the IEU-CEPA text was now entering legal drafting and translation into 24 languages before discussion in the European Parliament. He added that Indonesia had conducted political outreach across the European political spectrum, securing support from parties ranging from the left to the right.
He said the completion of IEU-CEPA was strategically important because both sides would benefit from zero tariffs on 90 percent of traded products. He added that after the agreement was finalised, Indonesia would launch its accession process to the Comprehensive and Progressive Agreement for Trans Pacific Partnership starting in 2026, joining countries such as Uruguay, Mexico, and Peru in the next round of members.
Airlangga said Indonesia was also preparing for accession to the Organisation for Economic Co operation and Development. He said 27 countries had already expressed like minded support for Indonesia, with the United States, Japan, South Korea, Australia, and New Zealand consistently mentioning Indonesia's OECD bid in bilateral negotiations. He estimated that 34 of 37 OECD members had openly supported Indonesia's entry.