Federal Government Announces New Trade Agreement With Indonesia

OTTAWA — On Sep. 24, Prime Minister, Mark Carney, welcomed the President of Indonesia, Prabowo Subianto, to Ottawa to announce the new Canada-Indonesia Comprehensive Economic Partnership Agreement (CEPA). This is Canada’s first-ever bilateral trade agreement with an ASEAN country.

In a statement, the federal government said that this agreement “will eliminate or reduce tariff and non-tariff barriers, create a more transparent and predictable environment for trade and investment, and open other opportunities for Canadian workers and industries in sectors such as clean technology, agri-food, infrastructure, critical minerals, and financial services.” Once the CEPA is fully implemented, the federal government stated that over 95% of current Canadian exports to Indonesia will have tariffs either reduced or fully eliminated, making Canadian exports – such as wheat, potash, wood, and soybeans – more competitive in Indonesia. CEPA will come into force in 2026.

To try and further drive investment in one another’s economies, Prime Minister Carney and President Subianto welcomed a new Market Leader Partnership Agreement between Export Development Canada (EDC) and the Indonesia Investment Authority (INA). Under this partnership, EDC will make debt financing of up to $825 million available to the INA. EDC and the INA will reportedly work in collaboration to try and attract investment and generate new business opportunities for Canadian exporters and investors in priority sectors across Indonesia, including infrastructure, renewable energy, and advanced manufacturing.

Prime Minister Carney and President Subianto also welcomed the signing of an agreement between the Business Council of Canada and Kadin, Indonesia’s Chamber of Commerce and Industry, to try and strengthen trade and investment ties between Canada and Indonesia.

Canada and Indonesia also reportedly signed a new Defence Cooperation Agreement, building on the Military Cooperation Memorandum of Understanding signed last month.

Canada is exploring trade ties with countries in other regions in response to tariffs and an uneasy trade alliance with the U.S., and the bilateral trade agreement with Indonesia may be partly in response to that.