Antara News·Indonesia·Thursday, October 29, 2026 at 03:16 AM UTC

Indonesia races to sign EU trade deal ahead of GSP expiry

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Bayu Saputra, Yashinta Difa

Once implemented, the IEU-CEPA is expected to liberalize approximately 98 percent of tariff lines, covering 99.5 percent of the total value of bilateral imports.

Jakarta (ANTARA) - Indonesia is targeting the signing of the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) this week to safeguard market access for Indonesian exports.

The push comes ahead of the scheduled end of Indonesia's preferential tariff benefits under the European Union's Generalised Scheme of Preferences (GSP) on January 1, 2027. Without a replacement arrangement, Indonesian exporters could face higher tariffs and reduced price competitiveness against foreign rivals.

“Our GSP facility will come to an end. The GSP is granted to low-income countries, whereas we have now reached the status of an upper-middle-income country. Consequently, we are no longer entitled to receive GSP benefits. Therefore, the solution is to ensure the IEU-CEPA is signed as soon as possible,” Coordinating Minister for Economic Affairs Airlangga Hartarto said in Jakarta on Wednesday (October 28).

Under the government's timeline, signing the agreement by the end of this week would allow the document to be submitted to the European Parliament by early November.

Domestic ratification is also expected to proceed in parallel, with the government aiming for the agreement to enter into force by early 2027.

Both parties are currently finalizing the English-language text. Once implemented, the IEU-CEPA is expected to liberalize approximately 98 percent of tariff lines, covering 99.5 percent of the total value of bilateral imports.

The agreement is expected to provide greater market access for key Indonesian exports, including palm oil derivatives, textiles, footwear, and rubber products, through the elimination of tariffs on eligible goods.

The EU market comprises approximately 450 million consumers and has a combined gross domestic product of around US$22 trillion. In return, Indonesia is expected to reduce or eliminate tariffs on major EU exports, including wood pulp, aircraft components, railway equipment, and fertilizers.

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