Economists believe that the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) could be a breath of fresh air to attract investment opportunities to Indonesia. Executive Director of the Center of Reform on Economics (Core) Indonesia Mohammad Faisal said that Indonesia must take advantage of the opportunities from the IEU-CEPA agreement. "Because this is a CEPA, not just an FTA [free trade agreement] which is only for trade in goods. This means that we also need to take advantage of the potential benefits of cooperation in the services sector and also investment [with the European Union]," Faisal told Bisnis, Tuesday (10/6/2025). Faisal explained that non-tariff barriers are the biggest issue for Indonesia to the European Union. For that reason, according to him, if Indonesia cannot lower non-tariff barriers, then another alternative that can be taken is to meet the European Union standards through cooperation established from the IEU-CEPA agreement.
Previously reported, the government will soon complete the IEU-CEPA negotiations which are now entering the final stage. Coordinating Minister for Economic Affairs Airlangga Hartarto said that Indonesia and the European Union have reached an important agreement in completing the final stage of the IEU-CEPA negotiations, which are expected to bring benefits to the community and national business actors. Meanwhile, Coordinating Minister Airlangga is targeting Indonesia's export rate to the European Union to increase by more than 50% in the next 3 to 4 years. Airlangga said that the IEU-CEPA agreement also opens up strategic investment opportunities from Europe to Indonesia. This is in line with the increasing trust in the domestic legal system and policies. "With the opening of the market and the elimination of tariff barriers, the IEU-CEPA is an important momentum to increase national competitiveness," he added. For information, the European Union is Indonesia's fifth largest trading partner, with a total trade value reaching USD 30.1 billion in 2024.
