The Council of the European Union has published a proposal for a Council Decision on the signing of the Comprehensive Economic Partnership Agreement (CEPA) between the EU and Indonesia, dated 29 June 2026. The document includes Annex 3-B, which sets out product-specific rules of origin (PSROs) that define when goods qualify as originating for preferential tariff treatment under the agreement.
The PSROs establish general principles based on change in tariff classification, production process, or maximum value or weight of non-originating materials. Key definitions include CC (change at 2-digit level), CTH (4-digit), and CTSH (6-digit), as well as MaxNOM, which sets a maximum percentage of non-originating materials relative to the ex-works price. Specific processes such as biotechnological processing, chemical reaction, distillation, mixing, and purification are recognized as conferring origin.
For textile products containing two or more basic textile materials, non-originating basic textiles up to 10% of total weight are allowed. For made-up textiles in Chapters 61-63, non-originating textiles up to 10% of the ex-works price are permitted if they come from a different heading. Agricultural products grown or harvested in a party are considered originating even if derived from imported seeds or bulbs.
Specific PSROs for live animals, meat, fish, dairy, vegetables, fruit, and cereals require wholly obtained materials. Spices under headings 09.04 to 0910.30 must be wholly obtained from Chapter 9 materials.
The rules are designed to ensure that only goods with substantial economic processing in either the EU or Indonesia benefit from preferential tariff treatment. The proposal will now be considered by the Council for adoption, after which the agreement can be signed and eventually ratified by both parties.
Stakeholders affected include EU and Indonesian exporters, particularly in agriculture, textiles, and processed goods, who must comply with the PSROs to claim tariff preferences. Customs authorities in both parties will need to verify origin documentation. The agreement is expected to boost bilateral trade by reducing tariffs on qualifying goods, but businesses may face administrative costs in proving origin.