Agreeing With IEU-CEPA, Airlangga Reveals Exports Are Projected To Increase 2.5 Times

JAKARTA - Indonesia and the European Union have officially signed a substantial settlement of the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) negotiations on Tuesday, September 23, 2025.

Coordinating Minister for Economic Affairs Airlangga Hartarto said that both parties had agreed to remove tariffs of more than 98 percent of tariff posts and nearly 99 percent of the total import value.

He said that after this agreement took effect, products from Indonesia would enjoy a zero rate at nearly 90 percent of the European Union market, which would be followed by a gradual elimination of additional tariffs.

Through this agreement, Airlangga said that Indonesia's exports to the European Union are expected to jump 2.5 times in the first five years of implementation.

According to him, this increase in exports is believed to encourage national welfare growth of up to around USD 2.8 billion.

"With these comprehensive IEU-CEPA features, Indonesia's exports to the European Union are expected to increase 2.5 times in the next five years of implementation. This growth will be accompanied by an increase in welfare of around 2.8 billion US dollars. More than 5 million workers in Indonesia will be positively affected by the implementation of the IEU-CEPA," said Airlangga at the Joint Announcement Indonesia IEU-CEPA, Tuesday, September 23.

Airlangga also emphasized that this agreement is expected to provide tangible benefits, especially in encouraging the growth of Indonesia's flagship industries, such as textiles, footwear, finished clothing, furniture, and other labor-intensive sectors.

Furthermore, he said that the European Union also opens new export opportunities for Indonesia, especially in high-tech products such as telecommunications and electronic devices.

Dalam aspek perdagangan, Ia menyampaikan bahwa kedua pihak berkomitmen untuk mempererat kerja sama, terutama dalam mempermudah proses ekspor-import dan meningkatkan sinergi antara otoritas customs.

In the investment sector, Airlangga highlighted that the European Union has so far included the top five foreign investors in Indonesia, with significant contributions in various key sectors, such as the chemical industry, pharmaceuticals, services, property, manufacturing, hospitality, trade, repair, and food.

He said that the IEU-CEPA will also provide better regulatory certainty for business actors, encourage technology transfer, and strengthen Indonesia's role in the global supply chain, including for important mineral commodities.

In addition, he said that this agreement includes a special chapter on digital trade, making it a modern and visionary agreement, as this innovative feature is in line with global trends and regional policies such as the ASEAN Digital Economy Framework Agreement (DEFA).

"This positions Indonesia to develop rapidly in the digital economy of the future, both at the regional and global levels," he said.

For information, the government targets the implementation of the IEU-CEPA to start in early 2027, or no later than the first quarter of 2027.