Indonesia is set to take on a central role in the European Union’s trade policy as both parties move closer to signing the Comprehensive Economic Partnership Agreement (CEPA). This agreement goes beyond lowering tariffs and boosting trade—it sends a clear strategic signal. The EU aims to diversify its global supply chains, reducing dependence on China, while positioning Indonesia as a key partner in Southeast Asia. For Indonesia, CEPA offers significant opportunities. It would open access to EU markets, attract foreign investment, and provide a more predictable regulatory framework. By strengthening its role in global value chains, Indonesia can leverage its position as ASEAN’s largest economy, serving as a bridge between the region and Europe.
Beyond economics, CEPA carries diplomatic weight. It reflects the EU’s broader strategy to build resilient partnerships in Asia amid rising geopolitical tensions. If successfully implemented, the agreement could transform Indonesia into a strategic hub for EU engagement in the region, while also pushing Indonesia to modernise its industries and regulations to fully capture the benefits of this partnership.
