The EU and Indonesia officially launched trade negotiations on 18 July 2016, with the 19th round held in July 2024. Since then, talks continued in an ad-hoc format. On 13 July 2025, European Commission President Ursula von der Leyen and Indonesian President Prabowo Subianto reached a political agreement on the Comprehensive Economic Partnership Agreement (CEPA), marking a decisive step toward finalisation by Commissioner Maroš Šefčovič and Coordinating Minister Airlangga Hartarto in September 2025.
On 23 September 2025, the EU and Indonesia concluded negotiations on both the CEPA and a parallel Investment Protection Agreement. The deal eliminates most tariffs on EU exports, including car parts, agricultural products, and pharmaceuticals, while opening investment opportunities in sectors such as electric vehicles.
“I am convinced that today’s conclusion of negotiations is just the beginning of an exciting new chapter,” Šefčovič said. Airlangga hailed the accord as “a milestone” that would “mitigate risks from the impact of the global tariff war.” Furthermore, President von der Leyen emphasized that the pact will foster jobs and growth while securing critical raw materials for Europe’s clean-tech industries.
In 2024, trade in goods between the EU and Indonesia reached €27.3 billion. The EU imported €17.5 billion worth of goods from Indonesia, while exporting €9.8 billion. Under the new agreement, tariffs will be eliminated on over 98% of tariff lines, covering nearly all trade by value. About 80% of tariffs will disappear immediately, with most of the rest phased out within five years.
The deal delivers strong benefits for key industries. For the EU, this includes agri-food, chemicals, machinery, and automotive products. For Indonesia, sectors like palm oil, textiles, and footwear gain significant advantages. Indonesia will scrap high tariffs on EU industrial goods such as cars (currently up to 50%), machinery, electrical equipment, pharmaceuticals, and chemicals, most of which will become duty-free either immediately or within a few years. EU agri-food exports will also benefit, with tariffs removed on processed foods, dairy, and meat products. In return, the EU will substantially reduce duties on most Indonesian exports.
Only goods genuinely made or significantly processed in the EU or Indonesia will benefit from tariff cuts. The agreement also maintains the right of both sides to use trade defence tools, such as anti-dumping or safeguard measures, if unfair trade practices occur. It also includes provisions to prevent circumvention and allows temporary safeguards if a surge in imports threatens domestic industries.
In 2023, trade in services between the EU and Indonesia reached €8.8 billion, with EU exports of €5.7 billion and imports of €3.1 billion. Both flows have grown by more than 50% over the past decade. The EU also remains a major investor, with foreign direct investment stock in Indonesia worth €25.1 billion, compared to €1.1 billion flowing the other way. Under the new agreement, European exporters are expected to save about €600 million annually from tariff removal.
The deal opens new opportunities for service providers and investors in areas like finance, telecoms, postal services, maritime transport, manufacturing, mining, and renewable energy. It guarantees fair treatment for EU companies, removes unnecessary local presence requirements, and guarantees predictable rules. Professionals will also find it easier to move temporarily between the two regions for business.
Digital trade is another pillar. The agreement secures free data flows, protects privacy, and ensures legal recognition of electronic contracts. It bans customs duties on digital products, shields consumers from fraud and spam, and prohibits forced transfer of source code. Cooperation will help SMEs benefit from digital trade and support innovation.
Public procurement will become more transparent and open, with tenders published in a single portal and equal treatment for EU and Indonesian companies. Negotiations on further market access will follow within five years.
On intellectual property, the deal strengthens copyright, trademarks, patents, designs, trade secrets, and plant varieties. Crucially, it provides high-level protection for 221 EU and 72 Indonesian geographical indications, covering iconic products like European cheeses and Indonesian coffee and spices.
Energy and raw materials are also addressed. The CEPA bans export monopolies and dual pricing, improves transparency in licensing, and promotes trade and investment in clean energy. EU renewable energy companies will gain fair access to Indonesian grids, while both sides commit to responsible resource management and ESG standards.
On sustainability, the deal links trade to climate action, workers’ rights, and inclusive growth. Both sides commit to implementing international agreements like the Paris Agreement, conserving forests and biodiversity, and tackling illegal logging, fishing, and wildlife trade. Market access is eased for low-carbon goods, services, and technologies, supporting the green transition.
Workers’ rights are also safeguarded. The agreement requires respect for ILO principles, including freedom of association, an end to child and forced labour, non-discrimination, and safe working conditions. It also promotes dialogue, decent labour standards, and responsible business practices.
The EU–Indonesia economic partnership agreement represents a significant step forward in deepening bilateral economic relations. By creating a more transparent, predictable, and fair trading environment, it strengthens trade and investment flows while supporting sustainable development, environmental protection, and high labour standards. The agreement establishes a long-term framework for cooperation, ensuring that both countries can respond effectively to global economic challenges and pursue shared prosperity.
