The negotiations on the Indonesian-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) concluded on 13 July 2025. This negotiation process finally reached its finish line after 19 formal rounds and several technical summits.
According to Airlangga Hartarto, the Indonesian Coordinating Ministry of Economic Affairs, the signing of this agreement will occur on 23 September 2025.
The kickoff of the economic partnership negotiations started in September 2016. Furthermore, 18 formal rounds of negotiations were conducted, with the 19th Round finally concluded in July 2024. Â Â
The IEU-CEPA is basically a comprehensive package deal that consists of various topics. Those topics consist of, among other trade in goods, customs and trade facilitation, small and medium-sized enterprises, digital trade, sustainable development, and dispute settlement. Â
The IEU CEPA and the European Green DealÂ
The adoption of this bilateral agreement should be taken into account by the EU while implementing its extraterritorial environmental policy. The EU is currently implementing the European Green Deal (EGD) to achieve the climate-neutral continent goal.
Furthermore, the EGD is implemented through the Fit for 55, targeted to reduce the EU's emissions by at least 55% by 2030. These hierarchical policy packages were basically adopted and are currently implemented to enforce the EU's commitment under the Paris Agreement.
Both the EGD and the Fit for 55 are generally implemented through regulations and directives related to the transboundary movement of goods. Those measures are among others, consist of the Renewable Energy Directive II (RED II), the Carbon Border Adjustment Mechanism, and the European Deforestation-Free Regulations.
As exporters of products deriving from deforestation and land expansion, the implementation of those measures potentially impairs Indonesia's exports to the EU. The extraterritorial nature of those measures could therefore constitute arbitrary or unjustifiable discrimination prohibited by the Agreement on Establishing the World Trade Organization (WTO Agreement) and the General Agreement on Tariffs and Trade 1994 (GATT 1994).
WTO Disputes involving Indonesia and the EUÂ
While discussing the potential inconsistencies, it is important to note that the EU and Indonesia are currently involved in disputes in the WTO Dispute Settlement Body (DSB).
