On 29 June 2026, the European Commission published a proposal for a Council decision authorising the signing of the Comprehensive Economic Partnership Agreement (CEPA) between the European Union and Indonesia. The agreement, which follows the conclusion of negotiations on 23 September 2025, will eliminate tariffs on over 98% of tariff lines, covering close to 100% of trade value, with 80% liberalised upon entry into force and 96% after a five-year phase-out. Bilateral trade in goods stood at EUR 28.9 billion in 2025, with EU exports of EUR 10.2 billion and imports of EUR 18.7 billion, while services trade reached EUR 9.3 billion in 2024.
The proposal marks the culmination of a process that began when the Council authorised bilateral free trade agreement negotiations on 13 July 2016, with negotiations formally launched on 19 July 2016 and the first round held on 20-21 September 2016. The CEPA will replace Indonesia's preferential access under the Generalised Scheme of Preferences (GSP), from which Indonesia graduates on 1 January 2027. The agreement protects 221 EU and 72 Indonesian geographical indications, covering products such as foodstuffs and beverages. A Trade Committee will supervise implementation, and Domestic Advisory Groups will meet at least once a year to monitor the agreement's impact.
The Commission estimates that foregone customs duties will amount to EUR 630-700 million annually upon full implementation, reflecting the near-total elimination of tariffs. For EU exporters, the agreement provides significant market access gains in Indonesia, a major ASEAN economy, while Indonesian exporters benefit from duty-free access to the EU market. EU consumers may see lower prices on Indonesian goods, but EU producers in sensitive sectors may face increased competition. The Council must now decide whether to sign the agreement, after which it will be submitted to the European Parliament for consent before ratification.
The proposal is a legislative act requiring Council adoption by qualified majority. It does not include provisions on investment protection or dispute settlement, which are expected to be addressed in a separate agreement. The Commission's impact assessment estimates that the CEPA will boost EU GDP by EUR 1.8 billion and increase bilateral trade by up to 15% over ten years.