Indonesia is promising a major overhaul to make exports less bureaucratic and more profitable, especially as two landmark trade agreements—the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) and the Indonesia-Canada Comprehensive Economic Partnership Agreement (ICA-CEPA)—move forward.
Trade Minister Budi Santoso admitted that Indonesian exporters have not yet fully taken advantage of preferential tariffs, despite the country signing dozens of trade agreements worldwide. According to him, utilization of tariff preferences has only reached 60–70%.
Cutting Export Red Tape
The Ministry of Trade is now preparing a new system that will automatically issue Certificates of Origin (SKA) for tariff preferences, ensuring exporters no longer have to fill out complicated paperwork. With this mechanism, tariffs will be applied at the lowest possible rate, sometimes even at 0%.
“Exporters don’t need to worry about choosing the right scheme anymore. The system will automatically ensure they get the lowest tariff available under our trade agreements,” Budi explained, as reported by Tempo.
He emphasized that the government should handle the administrative burden, not businesses. “If this is not done, utilization will never be maximized. This is an administrative issue, and it should be solved by the government,” Budi added.
Many Trade Deals, Limited Use
Indonesia currently has 20 trade agreements already implemented, 10 awaiting ratification, and 16 still under negotiation. But the benefits have not been fully felt by exporters.
During the Strategic Forum on Expanding Export Markets to Canada and the EU, Budi highlighted the gap between agreements signed and actual use by exporters.
To solve this, the government is rolling out two strategies:
- Automatic SKA Preference Issuance – to ensure exporters always enjoy the lowest tariffs without bureaucratic hassle.
- Joint Secretariats with Partner Countries – to streamline communication and problem-solving after agreements are signed.
“We agreed with the Canadian Trade Minister that each side must have a team. This way, exporters won’t be confused about who to contact after the deal is signed,” Budi explained.
Expanding Global Reach
The recent signing of ICA-CEPA in Ottawa on September 24, 2025, and the conclusion of IEU-CEPA talks in Bali on September 23, mark a turning point for Indonesia’s trade ambitions. The government aims to sign the EU agreement by the end of this year.
Indonesia’s total trade with Canada already reached USD 3.5 billion in 2024. Budi is optimistic this figure could double once ICA-CEPA is implemented.
Director General of International Trade Negotiations, Djatmiko Bris Witjaksono, warned that simply signing deals is not enough.
“These agreements will be meaningless if not followed up together by the government and businesses. Entrepreneurs must study the commitments carefully so they can truly benefit,” he said, as reported by Media Indonesia.
For exporters targeting Europe and North America, these reforms mean quicker approvals, less red tape, and greater opportunities abroad. For global investors, Indonesia is positioning itself as a more reliable and cost-efficient sourcing hub.
Source: Tempo, Media Indonesia, Kompas
Photo Credit: Unsplash
