September 24, 2025 | 03:25 pm
TEMPO.CO, Jakarta - The Coordinating Minister for Economic Affairs, Airlangga Hartarto, hopes that Indonesia's exports to the European Union will increase 2.5 times in the next five years after the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) is officially signed. The agreement was signed by Airlangga and the European Commission's Commissioner for Trade and Economic Security, Maro Efovi, on Tuesday, September 23, 2025, in Badung, Bali.
The EU is Indonesia's fifth-largest trading partner, with a total trade value reaching US$30.1 billion in 2024. The trade balance between the two parties also recorded a surplus for Indonesia, increasing from US$2.5 billion in 2023 to US$4.5 billion in 2024. "Indonesian exports to the EU are expected to increase 2.5 times in the next five years," said Airlangga.
He explained that with the growth of Indonesia's export performance, it will also be followed by increased welfare. Additionally, the IEU-CEPA agreement is expected to impact more than 5 million jobs. "This development will be followed by an increase in welfare of around 2.8 million U.S. dollars. More than 5 million workers in Indonesia will be affected by the implementation of IEU-CEPA," said Airlangga.
He stated that this agreement provides concrete benefits for Indonesia, especially in terms of exports. Furthermore, maintaining a broader market in the EU, and the liberalization of the market under IEU-CEPA will cover goods, services, and investments. Both countries have committed to eliminating tariffs on over 98 percent of tariffed goods and nearly 99 percent of the import value.
"After coming into effect, Indonesian products will immediately enjoy a 0 percent tariff in almost 90 percent of the European Union market, with further tariff reductions," he said.
He hopes that Indonesian exports can increase for important commodities, including palm oil, coffee, textiles, apparel, fisheries, clothing, electronics, and footwear products. Additionally, the EU has accepted Indonesia's proposal to export high-tech products, including telecommunications equipment.
"Both countries hope to strengthen cooperation to facilitate export and import procedures, with closer collaboration between governments," Airlangga stated.
In terms of investment, the EU has been one of the top five investors in Indonesia, with significant contributions in key sectors, including chemicals, pharmaceuticals, services, housing, industrial products, hospitality, trade, and the food industry.
According to Airlangga, the IEU-CEPA will provide greater regulatory certainty, encourage the transfer of technology, and strengthen Indonesia's integration into the global supply chain, particularly for critical minerals. "In addition, IEU-CEPA is a modern and visionary agreement, with important innovations such as a specific chapter on digital trade," he said.
However, even though the IEU-CEPA agreement has been signed, it does not take effect immediately. Implementation of this agreement requires ratification by two parliaments: the Indonesian parliament and the European Union parliament. For the EU, Airlangga stated that the deal that has been signed needs to be translated into 27 languages.
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