Indonesia and the European Union finalized the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) on September 23, 2025, after nearly a decade of negotiations. The deal eliminates import duties on over 90% of tariff lines, including a phased reduction of Indonesia’s 50% tariff on EU automobiles. Both parties see the agreement as a strategic move to boost exports and investment, especially in light of disruptive U.S. tariff policies. For Indonesia, the IEU-CEPA offers significant benefits for key export sectors like crude palm oil (CPO), textiles, and furniture, while making EU imports more affordable. However, the government must address challenges such as product standardization, sustainability enforcement, and protection of domestic industries during the transition. Despite previous EU tariffs ranging from 2.5% to 12% on Indonesian goods, the bloc still accounted for 6.6% of Indonesia’s exports, totaling US$17.3 billion. With IEU-CEPA, these tariffs will drop to zero, enhancing Indonesia’s competitiveness in the European market and potentially shifting export focus from the U.S. to the EU. Yet, structural hurdles remain, including the EU’s Carbon Border Adjustment Mechanism (CBAM) and Deforestation Regulation (EUDR), which impose additional compliance costs on carbon-intensive and deforestation-linked products. These regulations could limit the competitiveness of Indonesian exports like steel, cement, rubber, and wood, even under a zero-tariff regime.Source: https://www.thejakartapost.com/business/2025/10/14/buffering-the-shock-ieu-cepa-for-resilient-trade.html (ICE GIACARTA)

Fonte notizia: The Jakarta Post, 14 October 2025