Indonesia-EU CEPA Set for 2027 Launch Amid Export Compliance Challenges
The Comprehensive Economic Partnership Agreement between Indonesia and the EU is scheduled for a 2027 launch, with legal scrubbing underway. Exporters face compliance challenges with environmental regulations that could impact trade dynamics.
Theia Market Signal Identification - AI Assisted
Indonesia and the EU are progressing towards a 2027 launch of their Comprehensive Economic Partnership Agreement (CEPA), with legal scrubbing expected to complete this month. Bilateral trade reached $30.4 billion in 2024 and is projected to more than double post-CEPA.
While the pact promises zero tariffs on most goods, Indonesian exporters must comply with stringent EU environmental standards, including the EUDR and CBAM. The cost of transitioning to low-carbon production, particularly for iron and steel, poses a risk to maintaining current export levels.
Additionally, the palm oil sector, which exported 3.2 million tons to the EU in 2025, is concerned about potential impacts on state revenue from EU duties and levies. As Indonesia transitions from the GSP, the CEPA could influence its competitive stance in relation to Thailand and Malaysia.
Comments