BIA is very active - involved in new projects since now CEPA - EUDR as well as the Indonesian new policies not only poses challenges but a very wide range of opportunities especially in the global scenery we see and face in EU - SE Asia.
The EU–Indonesia CEPA represents a significant step in strengthening bilateral trade relations, offering mutual benefits in terms of market access and investment protection. While the EUDR presents challenges, the EU is working with Indonesia to navigate these issues, ensuring that trade and environmental goals are harmonized.
🇪🇺 EU–Indonesia Comprehensive Economic Partnership Agreement (CEPA)Status:
On September 23, 2025, the European Union and Indonesia concluded negotiations on the CEPA, marking a significant milestone in bilateral trade relations. The agreement is expected to come into force on January 1, 2027, following ratification by both parties. Trade and Economic Security
Key Features:
The EU views the CEPA as a strategic move to diversify trade partnerships and reduce economic dependence on China and the U.S. The agreement is expected to stimulate European investment in Indonesia, particularly in sectors such as renewable energy, semiconductors, and mineral processing. Trade and Economic Security
🌱 EU Deforestation Regulation (EUDR)Overview:
The EUDR, prohibits the placing on the EU market of products linked to deforestation and forest degradation. Key commodities affected include palm oil, soy, cocoa, coffee, and timber. Trade and Economic Security
Challenges for Indonesia:
The EU remains committed to enforcing the EUDR to combat global deforestation. However, it has acknowledged the need for cooperation with Indonesia to address sustainability concerns and ensure that trade agreements align with environmental standards. Trade and Economic Security
On September 23, 2025, the European Union and Indonesia concluded negotiations on the CEPA, marking a significant milestone in bilateral trade relations. The agreement is expected to come into force on January 1, 2027, following ratification by both parties. Trade and Economic Security
Key Features:
- Tariff Reductions: The CEPA will eliminate tariffs on approximately 98% of goods traded between the EU and Indonesia. Upon implementation, 80% of trade flows will be liberalized, with the remaining 18% phased in over five years. e2open.com
- Market Access: Indonesian exports, including palm oil, nickel, textiles, and footwear, will gain enhanced access to the EU market. In return, the EU will benefit from improved access to Indonesia's market for agricultural and manufactured goods. Trade and Economic Security
- Investment Protection: The agreement includes an Investment Protection Agreement (IPA), the first of its kind in EU trade history, establishing safeguards for investments and a dispute resolution mechanism. Trade and Economic Security
- Sustainability Commitments: The CEPA incorporates binding and enforceable chapters on sustainable development, addressing labor rights, environmental standards, and climate change. Trade and Economic Security
The EU views the CEPA as a strategic move to diversify trade partnerships and reduce economic dependence on China and the U.S. The agreement is expected to stimulate European investment in Indonesia, particularly in sectors such as renewable energy, semiconductors, and mineral processing. Trade and Economic Security
🌱 EU Deforestation Regulation (EUDR)Overview:
The EUDR, prohibits the placing on the EU market of products linked to deforestation and forest degradation. Key commodities affected include palm oil, soy, cocoa, coffee, and timber. Trade and Economic Security
Challenges for Indonesia:
- Smallholder Compliance: The regulation imposes significant administrative burdens on smallholders, who may lack the resources to comply with due diligence requirements. Mongabay
- Geolocation Data Requirements: The EU's demand for geolocation data to verify the origin of products has raised concerns in Indonesia, particularly regarding the feasibility of meeting these requirements. Mongabay
- Market Access Risks: Non-compliance with the EUDR could lead to restricted access to the EU market for Indonesian commodities, potentially affecting export revenues. Mongabay
The EU remains committed to enforcing the EUDR to combat global deforestation. However, it has acknowledged the need for cooperation with Indonesia to address sustainability concerns and ensure that trade agreements align with environmental standards. Trade and Economic Security