The Council of the European Union has received a proposal from the European Commission for a Council Decision to sign the Comprehensive Economic Partnership Agreement (CEPA) between the EU and Indonesia, with the full text of the agreement annexed. The proposal, published on 29 June 2026, marks a procedural step toward concluding a free trade area that would progressively eliminate tariffs and set rules on export duties, impacting EU importers of Indonesian goods and Indonesian exporters to the EU.
The Commission's proposal, submitted to the Council for approval, includes the complete text of the CEPA. The agreement establishes a free trade area aimed at liberalising and facilitating trade and investment between the two parties. It contains provisions on national treatment, reduction or elimination of customs duties according to schedules in Annex 2-A, and rules on export duties. Notably, export duties adopted or maintained before 13 July 2025 are generally exempt from the prohibition on new export duties, except for goods covered by an Export Duty Quota Schedule. Future export duties on mineral processing in the pre-smelting phase (HS Chapters 25, 26, and certain waste/scrap) are also permitted. If a party applies export duties outside these exemptions, the duty rate to the other party must be reduced by 50%. The Trade Committee may review and amend export duty provisions. The agreement reaffirms commitments to the UN Charter, Universal Declaration of Human Rights, and WTO rules.
Policy orientations and trade-offs The CEPA balances market access liberalisation with protections for Indonesia's domestic processing industry. The exemption for pre-smelting mineral processing allows Indonesia to maintain export duties on raw minerals to encourage domestic smelting, a key industrial policy. The 50% duty reduction requirement for non-exempt duties provides a partial concession to the EU. The grandfathering of pre-July 2025 duties protects existing Indonesian measures.
Impact on stakeholders EU importers of Indonesian palm oil, textiles, and minerals will benefit from tariff elimination, reducing input costs. Indonesian exporters gain preferential access to the EU market. EU producers of competing goods (e.g., vegetable oils) face increased competition. Indonesian consumers may see higher prices if export duties on raw materials persist.
Institutional follow-up The Council must now decide whether to adopt the decision authorising signature. Following signature, the agreement will be submitted to the European Parliament for consent before ratification.