Indonesia and EU Set to Finalize CEPA Deal After a Decade, Eliminating 80% of Tariffs
Main Takeaways
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BRUSSELS, Investortrust.id – Indonesia and the European Union are preparing to finalize their long-awaited Comprehensive Economic Partnership Agreement (CEPA) after a decade of negotiations, with both sides agreeing to eliminate tariffs on roughly 80% of traded goods.
Coordinating Minister for Economic Affairs Airlangga Hartarto and European Commission Executive Vice President Maroš Šefčovič exchanged official letters on Sunday, July 13, in Brussels, marking a political breakthrough aimed at accelerating the finalization of the pact.
The exchange of letters, which followed a bilateral tête-à-tête between the two leaders, serves as a high-level commitment to resolve the remaining substantive issues in the negotiations. According to Airlangga, the agreement signifies mutual appreciation for the progress made and outlines concrete steps toward completing the talks.
"This letter reflects our shared determination to resolve the negotiations comprehensively through a balanced and mutually beneficial outcome,” Airlangga said in a statement released Monday, July 14.
Political Endorsement from Top Leaders
The milestone was officially announced during a bilateral meeting between President Prabowo Subianto and European Commission President Ursula von der Leyen, also held on Sunday in Brussels.
Von der Leyen emphasized that the political agreement lays the foundation for concluding the CEPA in the near term. “This agreement will also help strengthen supply chains for critical raw materials essential for Europe’s clean tech and steel industries,” she said, adding that she looks forward to swift finalization.
With the CEPA nearing conclusion, the two sides aim to deepen strategic cooperation, enhance market access, and attract two-way investment between the EU—home to over 400 million people—and Indonesia, Southeast Asia’s largest economy with more than 285 million citizens.
10 Years, 19 Rounds of Negotiation
Negotiations for the IEU-CEPA began in 2016 and have since included 19 formal rounds and multiple technical meetings. The technical negotiations on the Indonesian side have been led by the Ministry of Trade’s Directorate General of International Trade Negotiations.
The agreement is expected to significantly expand market access, reduce trade costs, and improve investor confidence through regulatory transparency and dispute settlement mechanisms.
Šefčovič, speaking after the signing, said, “This is a milestone achievement and a symbol of our dedication to building closer ties with Southeast Asia. The IEU-CEPA will be a key instrument in that strategy.”