Indonesia and Canada have signed a landmark Comprehensive Economic Partnership Agreement (CEPA), signaling a commitment to deepen economic ties and foster sustainable trade growth. This milestone agreement, finalized after three years of negotiations, will take effect in 2026 and aims to create a more predictable and mutually beneficial trade relationship between the two G20 nations.

 

Indonesia’s Trade Minister, Budi Santoso, expressed optimism about the partnership, particularly its focus on critical minerals management to support Indonesia’s green growth goals and net-zero emission target by 2060. “This agreement represents a vital step in fostering sustainable trade and attracting Canadian investment into Indonesia’s key industries,” he said.

 

The CEPA will eliminate 90.5% of tariffs on Indonesian goods entering Canada, benefiting exports valued at $1.4 billion. With Indonesia holding significant reserves of nickel, tin, and copper, this agreement is expected to enhance resource-based trade and green technology collaboration.

 

Bilateral trade between Indonesia and Canada reached $3.4 billion last year, with Canadian estimates for 2023 placing it at $5.1 billion. Canada’s exports to Indonesia include agricultural products and fertilizers, while Indonesia exports machinery, electronics, garments, and footwear to Canada.

 

Canada’s Trade Minister Mary Ng highlighted the positive impact of the agreement on businesses and industries in both nations. “By reducing trade barriers, this agreement creates new opportunities, drives economic growth, and strengthens our shared commitment to sustainable development,” she stated.

 

In addition, Canada’s cattle industry is exploring opportunities to support Indonesia’s national school meal program, showcasing the expanding collaboration between the two countries.

 

The CEPA represents a forward-looking partnership that promises to enhance trade flows, attract investments, and contribute to a greener global economy.

 

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