Canada–Indonesia trade pact to expand market access and investment links
In return, up to 95% of Canadian products are expected to secure duty-free entry into Indonesia within the next year.
Canada and Indonesia have concluded a Comprehensive Economic Partnership Agreement (CEPA) designed to lower trade barriers, expand commodity flows, and strengthen investment ties, as both countries move to diversify economic partnerships.
The accord grants preferential access for more than 90% of Indonesian goods entering Canada, covering key exports such as textiles, palm oil, paper, and processed foods. In return, up to 95% of Canadian products are expected to secure duty-free entry into Indonesia within the next year.
Agriculture is set to see immediate gains. Canada already exports potash, wheat, and soy to Indonesia, and the agreement is expected to boost shipments of processed agri-food products. Energy cooperation could also deepen, with Indonesia exploring Canadian small modular reactor technology to support long-term power demand.
The pact establishes shared standards on digital trade and intellectual property, intended to improve transparency and streamline cross-border transactions.
Although bilateral trade remains modest—valued at about C$5 billion in 2024 compared with more than C$1 trillion with the United States—flows are projected to double within six years. Indonesia remains Canada’s largest export market in Southeast Asia and offers access to a regional base of 280 million people.
In parallel, Indonesia’s sovereign wealth fund has signed a $600 million investment partnership with Export Development Canada targeting infrastructure, renewable energy, cleantech, and agriculture.
The agreement forms part of Canada’s wider strategy to reduce reliance on the US, which absorbs around three-quarters of its exports, and to expand engagement across Asia. Indonesia, meanwhile, continues to broaden its trade footprint, having recently concluded a long-delayed deal with the European Union.
The CEPA requires ratification in both countries before taking effect, with officials signalling an accelerated process.
Written: Aiman Haikal