The Indonesian Employers Association (Apindo) projects an export surge of up to 50% over the next three years following the implementation of the Indonesia–European Union Comprehensive Economic Partnership Agreement (IEU–CEPA). This agreement is expected to have a significant impact, particularly on key national export sectors such as textiles, footwear, fisheries, and palm oil.

Apindo Chairwoman Shinta W. Kamdani noted that negotiations for the IEU–CEPA had been a long journey since 2009, only reaching completion after 19 rounds of talks between 2017 and 2024. According to her, businesses play an essential role as a bridge to ensure that the outcomes of the agreement go beyond written regulations and are truly felt within domestic industries.

Under the agreement, nearly all tariff barriers will be eliminated. Indonesia will cut import duties on 97.75% of products, while the European Union will remove tariffs on 98.61% of products, making Indonesian exports more competitive. Shinta also highlighted that the IEU–CEPA opens up new investment opportunities from Europe in sectors such as electric vehicles, renewable energy, pharmaceuticals, and semiconductors, with the added value of technology transfer.

However, despite the opportunities, challenges remain. The EU’s deforestation regulation and the Carbon Border Adjustment Mechanism (CBAM) are feared to increase national export costs. On the other hand, Apindo’s 2023 survey revealed that 79% of domestic businesses had never utilized free trade schemes such as FTAs or CEPAs—not due to lack of interest, but because of limited information and strategy.

Shinta stressed that this agreement will only have real value if it is fully implemented. Without maximum utilization, this historic deal will remain a vast but locked potential, failing to deliver optimal benefits for Indonesian businesses.

From : indotextilemagazine.com

Published: 25 September 2025