Antara News·Indonesia·Friday, October 30, 2026 at 09:41 AM UTC

Indonesia-EU trade pact targeted to take effect in Jan. 2027: Minister

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Suharsana Aji Sasra, Resinta Sulistiyandari

Jakarta (ANTARA) - Trade Minister Budi Santoso said the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) is expected to take effect in January 2027, ahead of the expiration of the European Union's Generalized System of Preferences (GSP) tariff facility for Indonesian products.

"Hopefully, the IEU-CEPA can be signed in November and implemented in January 2027 because the special tariff facility under the Generalized System of Preferences (GSP) will no longer apply from January 2027," he said at the 2026 National Leadership Meeting of the Indonesian Chamber of Commerce and Industry (Kadin) in Jakarta on Friday.

Santoso explained that trade agreements should not be assessed solely based on trade surpluses or deficits, but also on their contributions to domestic industrial development and export growth in participating countries.

"We need trade agreements to build relationships that facilitate trade," he added.

The minister said trade agreements were one way to expand export markets, noting that Indonesia had implemented 25 such agreements with other countries, while 13 others were still undergoing ratification.

Coordinating Minister for Economic Affairs Airlangga Hartarto said the IEU-CEPA was necessary to maintain Indonesian products' access to the European Union market ahead of the GSP tariff facility's expiration on January 1, 2027.

The GSP facility has provided tariff advantages for Indonesian products entering the EU, helping them compete with products from countries that do not enjoy similar preferential treatment. However, Indonesia will no longer be eligible for the facility from next year.

Hartarto therefore expressed hope that the IEU-CEPA could be signed that weekend, allowing the agreement to be submitted to the European Parliament in early November.

The agreement is expected to take effect in early 2027. Both parties are preparing the complete English-language documents before proceeding with discussions at the European Parliament and the ratification process in Indonesia.

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