KBRN, Badung: The Government of Indonesia and the European Union have officially announced the substantive conclusion of negotiations for the Indonesia–European Union Comprehensive Economic Partnership Agreement (IEU-CEPA), marking a major milestone in international economic diplomacy.

This agreement brings to a close a lengthy negotiation process that began in 2016 and paves the way for the signing and ratification phases.

Speaking in Nusa Dua, Bali, Coordinating Minister for Economic Affairs Airlangga Hartarto stated that the agreement is targeted to take effect on January 1, 2027. IEU-CEPA is a comprehensive economic cooperation framework that encompasses trade and investment.

“The signed agreement will be translated into 27 languages before being submitted to parliament for ratification, with the goal of implementation by January 1, 2027,” Airlangga said on Tuesday, September 23, 2025.

“We will also ensure that micro, small, and medium enterprises (MSMEs) benefit from this agreement by providing supportive measures to ease their participation.”

To raise public awareness about the benefits and opportunities of IEU-CEPA, particularly for the business community, the Indonesian government and the EU jointly hosted the Indonesia–European Union Business Outlook forum following the signing and joint announcement of the agreement.

The event, held in Bali, featured Minister Airlangga Hartarto and EU Commissioner for Trade and Security Maroš Šefčovič, and was attended by senior officials, diplomatic representatives, business associations, and industry leaders from both sides.

Minister Airlangga emphasized that the agreement is strategically important for Indonesia, as it expands market access for key products based on natural resources and high-value manufacturing.

Commissioner Šefčovič highlighted several trade sectors within the agreement as significant steps toward strengthening global supply chains, supporting the green transition, and fostering a transparent investment climate.

From a macroeconomic perspective, IEU-CEPA is expected to boost bilateral trade volumes, attract foreign direct investment, and create new employment opportunities. The agreement also serves as a strategic platform to promote the adoption of international quality standards, technological innovation, and sustainable development practices.

Once implemented, IEU-CEPA is projected to significantly enhance the competitiveness of Indonesian products, with over 98 percent of tariffs set to be eliminated. This will make Indonesia’s flagship commodities more competitive in European markets.

Early projections suggest that Indonesian exports to the EU could increase by nearly 60 percent in the initial phase, while also generating new jobs across various sectors. ***

Translator: Annaila Syafa Azzahra

Editor: Sri Wahyuni