Indonesia and Canada are set to reduce most tariffs on bilateral trade in goods starting in 2026, aiming to narrow Indonesia's trade deficit with Canada. The two nations signed a ministerial-level joint statement on Monday (2/12/2024), marking the substantive completion of the Comprehensive Economic Partnership Agreement (CEPA), after three years of negotiations. However, the agreement must undergo a legal review, followed by signing and ratification before it becomes effective. Indonesia’s Minister of Trade, Budi Santoso, revealed that CEPA is expected to be signed in mid-2025, with implementation targeted for 2026. The deal will provide Indonesia with up to 90.5% tariff liberalization on goods entering Canada, equivalent to trade valued at USD 1.4 billion. The CEPA will also promote bilateral trade in services and facilitate investments in agriculture and manufacturing sectors.

Minister Budi emphasized that priority access will be given to Indonesian products such as paper, processed foods, edible bird nests, and palm oil. He expressed optimism that CEPA will help Indonesia achieve a trade surplus with Canada, as the country recorded a reduced deficit from USD 1.7 billion in 2022 to USD 846.8 million in 2023. Total bilateral trade stood at USD 3.4 billion in 2023, down from USD 4.3 billion in 2022. Canadian Trade Minister Mary Ng highlighted CEPA’s mutual benefits, stating that Canada could serve as a gateway to the North American market for Indonesian businesses. As the only G7 nation with comprehensive free trade agreements with six major global economies, Canada offers Indonesian companies access to 1.5 billion international customers. Both parties view CEPA as a strategic step to enhance trade and global market connectivity.

Source: https://investor.id/international/382174/indonesia-dan-kanada-longgarkan-tarif-dagang-mulai-2026/2