Brussels: In a significant diplomatic and economic breakthrough, the European Union and Indonesia have officially signed a political agreement that paves the way for a long-awaited Comprehensive Economic Partnership Agreement (CEPA). This landmark move is aimed at deepening economic ties and expanding market access between the 27-member bloc and Southeast Asia's largest economy.
The political accord was jointly announced during a high-level meeting in Brussels between European Commission President Ursula von der Leyen and Indonesian President Prabowo Subianto. The leaders described the agreement as a “milestone moment” in bilateral relations, reflecting a shared commitment to fair trade, sustainable growth, and geopolitical stability.
“Today’s political understanding brings us one step closer to a balanced and ambitious free trade agreement,” said von der Leyen. “We are creating real opportunities for workers, businesses, and consumers on both sides.”
President Subianto echoed this optimism, emphasizing Indonesia’s strategic vision for global partnerships. “We want to show that even amid uncertainty, cooperation based on mutual respect and benefit is not only possible it is essential.”
The CEPA, which has been under negotiation since 2016, seeks to eliminate tariffs on more than 80% of Indonesian exports to Europe, including palm oil, textiles, coffee, and seafood. In return, the deal would grant European companies greater access to Indonesia’s vast consumer base, particularly in sectors like automobiles, machinery, pharmaceuticals, and processed food.
Moreover, the pact includes strong provisions on labor rights, environmental sustainability, and digital trade, aligning with the EU’s trade values and climate goals. It is also expected to streamline investment procedures and enhance legal protections for foreign investors.
The political agreement comes at a time when both parties are seeking to diversify their trade networks amid rising global protectionism and geopolitical tension. For the EU, Indonesia represents a vital gateway to the ASEAN region. For Jakarta, closer ties with Brussels serve as a counterbalance to over-reliance on traditional economic giants like China and the United States.
Von der Leyen stressed that the agreement is “not just about trade it’s about values and vision.” She pointed to the inclusion of sustainable development chapters and commitments to reduce deforestation and carbon emissions as examples of shared priorities.
While this political accord is not yet the final trade deal, it removes significant roadblocks and gives fresh momentum to negotiations. Both parties now aim to finalize the CEPA text by early 2026, pending legal scrubbing, translations, and ratification by EU institutions and Indonesian lawmakers.
Experts believe that once enacted, the deal could boost bilateral trade by 50% within five years, and generate tens of thousands of new jobs in both regions.
In conclusion, the EU Indonesia political agreement signals more than just economic cooperation. It reflects a deepening partnership between Europe and the Indo-Pacific anchored in openness, mutual benefit, and a shared determination to shape a more stable and prosperous global order.