Coordinating Minister for Economic Affairs Airlangga Hartarto declared notable advancements in discussions regarding the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEUCEPA), highlighting the European Commission’s action to present a conclusion proposal to the EU Council.
The proposal additionally addresses the Investment Protection Agreement (IPA), representing a vital milestone in the prolonged negotiations.
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He remarked that Indonesia, being the largest economy in Southeast Asia, is ideally situated to collaborate with the European Union to widen markets and create greater economic growth that benefits both Europe and the Indo-Pacific area.
“Indonesian President Prabowo Subianto hopes this development will serve as a game changer for the global market,” Airlangga remarks.
The minister stated that IEUCEPA and IPA are currently pending approval from the EU Council before being presented to the European Parliament for final ratification and implementation. Concurrently, he added, the Indonesian government has been engaging in ratification following national procedures to achieve prompt execution of the IEUCEPA.
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“Our target is to complete the IEUCEPA ratification process in the second half of 2026 to allow for implementation by early 2027,” he says.
Airlangga elaborated that the EU perceives both agreements as tactical tools to diversify economic relationships, enhance trade and investment connections with key partners, create new export pathways, and strengthen the resilience of energy and raw material supply chains.
In the meantime, Indonesia seeks to utilize the IEUCEPA to gain a stronger foothold in European markets, improve product competitiveness, draw in high-quality investments, and bolster its role in global value chains.
According to the agreement, the EU will cut import tariffs on 98.5 percent of tariff lines; streamline processes for Indonesian exports; investigate possible investments in key sectors like electric vehicles, electronics, and pharmaceuticals; and enhance safeguarding of intellectual properties and supply chains.
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Airlangga expressed optimism that the implementation will boost industrial productivity, enhance job creation, and promote more inclusive and sustainable economic development.