The EU-Indonesia Comprehensive Economic Partnership Agreement (CEPA)

Located in south-east Asia, Indonesia is the world's fourth biggest country by population, but only 33rd among EU (European Union) trading partners, well behind even other countries in the region. Data on trade in services and on foreign direct investment (FDI) also point to untapped potential between the EU and the fifth biggest Asian economy. After almost a decade of negotiations, in September 2025 the EU and Indonesia announced the conclusion of negotiations for a Comprehensive Economic Partnership Agreement (CEPA) and an Investment Protection Agreement (IPA). Once signed, the texts will be transmitted to the European Parliament for consent. The CEPA is more complex than a simple free trade agreement (FTA); the EU and Indonesia engaged in a broad economic partnership including investment, services, intellectual property, and regulatory cooperation. The EU and Indonesia are to eliminate 98.5 % of tariff lines. Liberalisation will be effective at 80 % when the agreement enters into force; the remaining tariff lines will be eliminated over the following five years. The EU agri-food, chemicals, machinery and automotive industries will benefit in particular from the CEPA. Indonesia has agreed to protect 221 EU Geographical Indications (GIs), while the EU will protect 72 Indonesian GIs. Raw materials are included in the CEPA, which also contains a Protocol on palm oil, one of the most contentious issues during the negotiations. The IPA does not contain any investor–state dispute settlement – or ISDS – provisions. The Parties agreed a voluntary mediation mechanism for investor-state disputes and a state–state dispute settlement mechanism (SSDS). They will continue negotiations to agree on an ISDS within three years.