Economist Urges Faster Indonesia-EU Trade Pact to Boost Exports

RRI.CO.ID, Jakarta - Indonesia should accelerate the ratification of the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) to expand export opportunities, attract investment, and strengthen long-term economic competitiveness.

"The first priority is to accelerate export market diversification, particularly to the Middle East, Africa, and Latin America, while expediting trade agreements such as the IEU-CEPA and maximizing the benefits of the Regional Comprehensive Economic Partnership (RCEP)," economist Yusuf Rendy Manilet of the Center of Reform on Economics (CORE) Indonesia said on Friday, July 3, 2026, as quoted by Antara.

The IEU-CEPA aims to expand market access, increase trade in goods and services, and encourage investment between Indonesia and the European Union.

Yusuf also called for expanding downstream industries beyond nickel to commodities such as bauxite, copper, and value-added agricultural products, while improving logistics, port efficiency, and export financing to help labor-intensive industries remain competitive.

He added that the government should review domestic regulations, including export foreign exchange (DHE) requirements and licensing procedures, to improve export performance.

Indonesia and the European Union concluded substantive IEU-CEPA negotiations in 2025 and aim to complete ratification in the second half of 2026, allowing the agreement to take effect in early 2027.

Coordinating Minister for Economic Affairs Airlangga Hartarto said the process had entered a key stage after the European Commission submitted the agreement and its accompanying Investment Protection Agreement (IPA) to the Council of the European Union.

If approved, the agreements will proceed to the European Parliament for final approval, while Indonesia continues its domestic ratification process.

Airlangga said the IEU-CEPA will eliminate tariffs on 98.5 percent of tariff lines, improve market access for Indonesian exports, attract investment in sectors such as electric vehicles, electronics, and pharmaceuticals, and strengthen Indonesia's integration into global value chains.

He added that the agreement is expected to boost industrial productivity, create jobs, and support sustainable economic growth. ***