Indonesia, EU Finalize Comprehensive Economic Partnership Agreement
After nine years of negotiations, Indonesia and the EU have finalized a comprehensive economic partnership agreement (CEPA). The signing took place in Bali, with EU Commissioner Maros Sefcovic and Indonesian Coordinating Minister Airlangga Hartarto putting pen to paper. This marks a significant step in the EU's strategy to diversify partnerships and strengthen trade ties with Indonesia.
The CEPA, set to take effect in 2027, is described as comprehensive and mutually advantageous. It links economic development with social protection and effective environmental governance, anchored in the Paris Agreement on climate change. The agreement promotes sustainable development by encouraging investment in renewable energy and green technologies, and establishing a framework for cooperation on environmental, climate, and agricultural issues.
The CEPA promises tangible benefits for both sides. European farmers and businesses will see import tariffs reduced or eliminated on a wide range of products, saving EU exporters an estimated EUR 600 million annually. Indonesian consumers, on the other hand, will gain greater access to high-quality European products at more affordable prices. Following the signing, a legal review and translation of the agreement into official languages will take place before seeking ratification from EU member states, the European Parliament, and Indonesia. Notably, individual EU member states do not need to ratify the agreement separately, as it only requires approval from the EU Council and the European Parliament.
The CEPA, once ratified, is expected to bring strong momentum for trade, investment, and sustainability. It reflects the EU's commitment to diversifying its partnerships and strengthening ties with Indonesia. The agreement is a testament to the shared commitment of both parties to sustainability and effective environmental governance.
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