On June 6, 2025, Airlangga, Indonesia’s Coordinating Minister for Economic Affairs, announced that Indonesia and the European Union (EU) have successfully concluded the long-awaited negotiations for the Comprehensive Economic Partnership Agreement (CEPA). The negotiations, which spanned nine years and involved 19 rounds of intensive consultations, culminated in an agreement that marks a new phase of economic cooperation between Indonesia and the EU.
At a virtual press conference in Brussels, Airlangga revealed that both parties have agreed to resolve all remaining negotiation issues and plan to announce the substantial completion of the talks by the end of June.
The agreement is expected to bring significant advantages to Indonesian exports. Once the agreement takes effect, approximately 80% of Indonesian goods exported to the EU will enjoy zero-tariff treatment, thereby greatly enhancing the competitiveness of Indonesian products in the European market.
Key Areas of the Agreement
The negotiations covered not only traditional trade goods but also several emerging fields. Specifically, the agreement focuses on the following areas:
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Renewable Energy and Electric Vehicle Ecosystem: These green industries, which align with the global trend of sustainable development, have become a key area of cooperation between Indonesia and the EU.
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Labor-intensive Industry Products: Products such as footwear and apparel will gain greater market access, further boosting exports from Indonesia’s manufacturing sector.
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High-quality Agricultural Products: Indonesian products like palm oil and fishery products will enter the EU market with lower trade barriers.
The EU also focused on issues related to technical requirements for the automotive industry, the extraction of critical minerals, and related investment infrastructure.
Looking Ahead
The CEPA agreement will not only reduce tariff barriers but also help eliminate non-tariff barriers, creating a more open and fair competitive environment for businesses on both sides. Moreover, the implementation of the agreement is expected to attract investment, promote technical cooperation, and inject new momentum into trade and economic growth between Indonesia and the EU.
Source: Bisnis (June 7, 2025)
Wanxinda Industrial Park in Batang National Economic Zone, Indonesia
Located within the Batang Industrial Special Zone (KEK Industropolis Batang) in Central Java, Indonesia, the Wanxinda Industrial Park offers flexible factory and land lease-sale services. It assists enterprises in quickly establishing a presence in Indonesia through a “one-stop” service model.
In the Current Restructuring of the Global Trade Landscape, Waiting and Seeing Is the Most Expensive Strategy!
As the largest economy in ASEAN, Indonesia is offering a “zero-time-difference” production solution for manufacturing through a combination of national-level economic zones and ready-to-use standardized factories:
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Tariff Breakthrough
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Bypass the US 125% additional tariff list on China. Relying on the Indonesia-ASEAN Free Trade Area (AFTA) and the Regional Comprehensive Economic Partnership (RCEP), enjoy zero-tariff export treatment for 90% of goods within the region.
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Cost Lock-in and Win
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Tax Policy: Enterprises in the economic zone enjoy a 15-year corporate income tax exemption (full exemption for the first 5 years, and a 50% reduction for the following 10 years), and complete exemption from import tariffs on equipment.
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Labor Costs: The workforce under 25 years old accounts for 38%, with an average monthly salary in manufacturing being only one-third of that in China.
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Energy Security: Electricity prices are approximately 0.5 RMB per unit, with peak rates at 0.75 RMB.
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Employee Social Security: Health insurance is paid at 1% of the salary by both the employer and employee; pension insurance is paid at 8.4% of the salary by the employer; and work injury insurance is paid at 0.24% of the salary by the employer. (Total less than 10%)
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Ready-to-Use Advantage
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In the Batang Economic Zone of Central Java, 1 million square meters of high-standard ready-to-use factories are available for immediate lease:
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Complete infrastructure
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Adjacent to highways
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Bonded area
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Green and energy-efficient factories
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“One-stop” services
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At this moment, what is even rarer than a “cost valley” is a “strategic springboard” resource.
Please contact the Wanxinda Business Development Team immediately to obtain a customized implementation plan—starting while others are hesitating is the true competitive edge!
The Central Java Economic Zone Management Committee offers bilingual (Chinese-English) officers available for 7×24-hour response.
