Indonesia is targeting the signing of the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) by October 2026, with the government aiming for the agreement to begin implementation in early 2027.
Coordinating Minister for Economic Affairs Airlangga Hartarto said on 21 August that the English-language documentation for the agreement was nearing completion. Following the signing, the agreement will be submitted to the European Parliament for ratification. On the Indonesian side, Minister of Trade Budi Santoso has consulted with the House of Representatives on the ratification mechanism, with the government considering the use of a Presidential Regulation to accelerate implementation.
The Coordinating Ministry for Economic Affairs said on 22 August that the IEU-CEPA text was already with the Council of the European Union. Taking into account the EU institutional calendar, the government projects that the agreement could be signed in late September or early October 2026. Based on previous EU trade agreements, the ministry said the ratification process could take around 90 days at its fastest, supporting the government's target for implementation in early 2027.
Once implemented, Indonesia is expected to receive immediate zero-tariff access for 90.4% of tariff lines, while tariffs on another 8.37% will be reduced gradually. The government identified palm oil, footwear, coffee, furniture, agricultural and fisheries products, and telecommunications among the Indonesian sectors expected to gain wider access to the EU market. European companies, meanwhile, are expected to gain broader access to the Indonesian market and more competitive sources of supply.
The timing of the agreement is also linked to the EU's Generalised Scheme of Preferences (GSP) for Indonesia, which is due to expire at the end of 2026. The Indonesian government has said it is seeking to minimize any gap between the expiration of the existing trade preference and the implementation of IEU-CEPA.
Investment was also discussed during a high-level dialogue between the Indonesian government, the EU Delegation and representatives of EU member states in Jakarta on 21 August. Indonesia is seeking greater European investment in sectors including advanced manufacturing, renewable energy, electric vehicles, digital technology and pharmaceuticals, alongside technology transfer and domestic industrial development. Other areas identified for expanded cooperation include cybersecurity, agriculture, innovation and technology.
The dialogue also addressed preparations for implementation and several issues affecting European businesses operating in Indonesia. Representatives of EU member states raised non-tariff barriers including halal certification, Indonesian National Standards (SNI) and local content requirements (TKDN), as well as transparency and predictability in procurement and tender processes. Customs procedures, standardization, certification and agricultural import recommendations were also discussed.
The Indonesian government said it is preparing several mechanisms to address implementation issues. These include a de-bottlenecking team coordinated by the Coordinating Ministry for Economic Affairs and the planned appointment of a single contact point for IEU-CEPA implementation. The Ministry of Trade is also preparing implementing regulations across ministries, while the Ministry of Industry is expected to coordinate issues related to SNI and TKDN.
Preparations also cover EU regulations and policies that will continue to apply independently of the trade agreement, including the European Union Deforestation Regulation (EUDR), the Carbon Border Adjustment Mechanism (CBAM) and EU steel policies. Indonesia has prepared digital certification and geolocation data for palm oil to support compliance with EU traceability requirements, while discussions are continuing on the risk classification of Indonesian commodities under the EUDR.
The IEU-CEPA negotiations have been underway for almost a decade. Following signing and ratification, Indonesia and the EU will move toward implementing the agreement, with both sides currently preparing the regulatory and administrative measures required for it to take effect.
