Indonesia’s Ministry of Trade is preparing for the implementation of the Indonesia–European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) by establishing an IEU-CEPA Business Council. The council will be formed in collaboration with national business groups.
Preparing for Implementation
Trade Minister Budi Santoso stated that negotiations with the European Union are currently in the legal scrubbing stage and are anticipated to be completed in May. The process is expected to seize time due to the requirement for approval from all 27 EU member states.
To facilitate a smooth rollout, the Ministry of Trade will perform with the Indonesian Chamber of Commerce and Industry (Kadin) and the Indonesian Employers’ Association (Apindo) to form the Business Council. This council will serve as a platform for communication between Indonesian and European companies, allowing them to identify potential partnerships before the agreement takes effect.
Potential Economic Benefits
According to the Ministry of Trade, the IEU-CEPA has the potential to eliminate up to 98 percent of tariff lines in the EU market. Director General of International Trade Negotiations Djatmiko Bris Witjaksono explained that the agreement will remove almost all trade barriers for goods and services and open up broader investment opportunities.
Key Indonesian sectors expected to benefit include textiles and footwear, labor-intensive industries, manufacturing, and agriculture. The agreement will also expand market access for professional services, such as legal advisory, architecture, information technology, healthcare, and engineering. Investment, particularly in green sectors like renewable energy and electric vehicles, and technology-driven industries, could also observe improvements.
Frequently Asked Questions
When are negotiations with the EU expected to be completed?
Negotiations with the European Union have entered the legal scrubbing stage and are expected to be completed in May.
Who will be involved in the IEU-CEPA Business Council?
The IEU-CEPA Business Council will be formed in collaboration with the Indonesian Chamber of Commerce and Industry (Kadin) and the Indonesian Employers’ Association (Apindo).
What percentage of tariffs could be eliminated through the IEU-CEPA?
The IEU-CEPA has the potential to eliminate up to 98 percent of tariff lines in the EU market.
As Indonesia prepares to finalize this significant trade agreement, will the collaborative approach of the IEU-CEPA Business Council prove effective in unlocking new economic opportunities for Indonesian businesses?