Key elements of the EU-Indonesia Trade Agreement and Investment Protection Agreement

Bilateral trade in goods between the two partners equalled €27.3 billion in 2024. EU goods imports from Indonesia stood at €17.5 billion in 2024, while EU goods exports reached €9.8 billion last year.

The EU and Indonesia will eliminate tariffs on over 98% of tariff lines, and close to 100% in terms of value. 80% will be liberalised already at entry into force, and after a 5-year phase out liberalisation will reach 96% of trade.

Strong benefits for key economic sectors on each side, such as:

For the EU: agri-food, chemicals, machinery and automotive industries.
For Indonesia: palm oil, textile and footwear.

Indonesia will remove high duties on industrial products, such as:

Motor vehicles (current tariffs up to 50%, to be removed mostly over 5 years).
Machinery and electrical equipment (mostly duty-free at entry into force, remaining after five years).
Pharmaceuticals (mostly duty-free at entry into force, remaining after 3 years).
Chemicals (mostly duty-free at entry into force, remaining after five years).

The agreement will also eliminate duties on EU agri-food exports, such as:

Processed foods (current up to 30% tariffs, many to be eliminated at entry into force, some after short staging)
Most dairy products (current up to 10 % tariffs, to be eliminated mostly at entry into force)
Meat products (current 5 to 20 % tariffs, to be eliminated mostly at entry into force)
The agreement will also eliminate or substantially reduce EU duties on most Indonesian goods exported to the EU.

Rules of Origin

The EU and Indonesia have agreed rules of origin that ensure that only products that have been significantly processed in one of the parties can benefit from the tariff preferences of the agreement. This ensures that the benefits of the agreement accrue to products made in the EU or Indonesia and not to those made in third countries.

The documentation on origin follows the latest standards based on self-certification by businesses to make it as easy as possible to benefit of the tariff reductions, especially for small and medium sized companies.

The verification of the origin is based on contacts of local customs authorities with the importer and may be followed by administrative cooperation between the customs authorities of the EU and Indonesia.

Customs and Trade Facilitation

The deal will help companies trading goods between the EU and Indonesia get their goods easier and faster through customs.

It will ensure effective customs control, so that imported goods meet all the rules of the importing country including requirements related to safety, security and respect of intellectual property rights.

Indonesia and the EU have already agreed on the Trade Facilitation Agreement (TFA) within the framework of the World Trade Organization.

The Chapter on Customs and Trade Facilitation consolidates the achievements under the TFA and in some areas goes even further than the TFA provisions.

The agreement includes

substantive provisions on transparency of the legislation,
procedures, and rules to be complied with at the border and
commitments to provide easy access to information on applied tariffs,
rules for the classification or valuation of products for customs purposes as well as
consultation of business community prior to the adoption of new customs legislation,
common principles for customs legislation and
enhanced cooperation and exchange of information between the customs authorities of the EU and Indonesia to improve effectiveness of customs control and facilitate, where possible, import, export and transit.

Protocol on Mutual Administrative Assistance in Customs Matters

Fraudsters often try to exploit gaps between national customs systems, for example through smuggling, undervaluation of goods, or counterfeiting. The Protocol on Mutual Administrative Assistance in Customs Matters will provide the legal framework for OLAF and customs authorities from the European Member States, and Indonesia to exchange information, request assistance, and carry out coordinated checks. In simple terms, it is a practical tool to fight fraud, protect public finances, and safeguard citizens from unsafe or counterfeit products.

Key Features

Information Exchange: Customs authorities can share details about suspicious goods, companies, or trade flows.
Access to Records: Customs authorities may request certified copies of customs declarations, invoices, or shipping documents held by their counterparts.
On-the-Ground Assistance: At the request of the partner authority, customs officials can monitor certain movements of goods or conduct targeted inspections.
Confidentiality and Data Protection: All information exchanged is treated as confidential and can only be used for customs purposes.

Practical Benefits

Stronger Enforcement: Fraudulent or suspicious activities can be identified and stopped more quickly.
Fair Competition: Honest businesses benefit when authorities prevent competitors from gaining unfair advantages through fraud or smuggling.
Consumer Protection: Dangerous or counterfeit products can be more effectively intercepted before they reach the market.
Secured Revenues: Governments can collect the correct amount of customs duties and taxes, protecting public finances.
More Efficient Controls: With better risk information, customs officers can focus checks on high-risk shipments while facilitating legitimate trade.

Trade Remedies

The agreement confirms allows using the trade defence instruments (anti-dumping, anti-subsidy, global safeguards) to tackle unfair trade between the parties.

It specifically addresses circumvention and provides for cooperation on trade remedy matters in form of a best practices dialogue.

The agreement also includes a bilateral safeguard mechanism, which allows the EU and Indonesia to impose temporary measures in case a significant increase of preferential imports causes, or threatens to cause, serious injury to their domestic industry.

Sanitary and phytosanitary measures

The ambitious chapter on Sanitary and Phytosanitary (SPS) matters, which covers food safety and animal and plant health, will uphold our highest standards. The agreement preserves the way the EU adopts and enforces its food safety rules, be it for domestically produced or imported products.

The agreement reaffirms the principles of the WTO SPS Agreement.
The EU and Indonesia will reinforce joint work on SPS matters to ensure rapid intervention in emergencies related to imports and exports of agriculture and fishery products. Among other things, this will include increased transparency, fast information exchange and technical consultations, bilateral and international cooperation in key areas, official controls and certification as well as border import checks.

Technical Barriers to Trade

The CEPA aims to remove technical barriers to trade in goods between the EU and Indonesia. It creates a more transparent, predictable, and cost-effective environment, enhanced market access and reduced costs.

Recognition of EU certification

For key sectors like electronics, machinery, and energy-efficient products, Indonesia agreed to accept certificates and test reports from EU-based, accredited bodies.
This eliminates the need for expensive and time-consuming re-testing and re-certification in Indonesia.

Streamlined labelling

The deal prohibits unnecessary fees or prior approval for labels.
It allows EU exporters to use internationally accepted symbols and additional languages on product labels.
it permits re-labelling within Indonesian customs warehouses, simplifying logistics and reducing the risk of customs delays.

Improved Regulatory Transparency & Predictability

Both sides commit to a minimum 60-day period for public comments on any new technical regulations. This provides businesses and authorities a formal channel to provide feedback and contribute to the final outcome.
A minimum 6-month interval is required between the publication of new regulations and their entry into force. This gives exporters ample time to adapt production processes and supply chains.
The chapter encourages both Parties to use relevant international standards as the basis for their regulations. This prevents the creation of country-specific rules that would otherwise force EU manufacturers to re-design their products.
the deal mandates that both parties adopt and apply relevant international standards as the basis for their technical regulations. This provision is crucial for the EU as it ensures that products manufactured to globally recognized standards, such as those from the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC), can more easily access the Indonesian market.

Strategic cooperation and consumer safety

The agreement establishes a framework for cooperation on market surveillance and product safety.
The EU and Indonesia can exchange information on non-compliant products, including through the EU's Rapid Alert System (RAPEX). This enhances the protection of EU consumers from potentially unsafe goods.
The creation of dedicated TBT Chapter Coordinators provides a clear channel for ongoing dialogue and fast-tracked resolution of any technical or administrative issues that may arise.

Automotive Annex

Different technical regulations and approval systems for vehicles can create significant trade barriers and increase compliance costs. The automotive annex reduces duplication, promotes international standards, and secures predictability and with a two-step approach. The annex ensures that EU vehicles with UN type-approval certificates identified in the agreement do not face additional testing or marking requirements in Indonesia, reducing costs and time-to-market.

Upon the CEPA’s entry into force, Indonesia joins the UNECE 1958, whichever is earlier, Indonesia will accept EU vehicles certified in line with 86 UNECE 1958 regulations. This removes the need for duplicative testing and ensures that UNECE type-approval certificates issued in the EU are recognised in Indonesia. At the same time, the EU will facilitate access for vehicles manufactured in Indonesia that meet those international standards.

As soon as it joins the UNECE 1958 Agreement or by 2033 at the latest, Indonesia will base its new technical regulations, markings, and conformity assessment procedures on UNECE Regulations. There will be no systematic retesting of EU products, with compliance checks by Indonesia limited to random sampling. This ensures that EU vehicles and components incorporating innovative features will get accepted also in cases where there are no corresponding Indonesian rules. This provision is particularly relevant for electric vehicles, advanced safety systems, and digital automotive technologies. Proven risks to health, safety, or the environment can give way to some restrictions. Implementation will be overseen by a dedicated Automotive Working Group, which will provide a forum for dialogue and to resolve technical issues. It will build a long-term partnership in the automotive sector, including by supporting the development of Indonesia’s technical capacity.

The agreement strengthens the EU’s role in shaping global automotive regulatory norms by assisting Indonesia to join the 1958 Agreement, which is the principal international framework governing automotive standard, and adopt UNECE standards, embedding EU regulatory preferences internationally and ensuring long-term benefits for EU industry and more predictable conditions for trade.

Trade in services and investment

Trade in services amounted to €8.8 billion in 2023, with EU exports amounting to €5.7 billion and imports amounting to €3.1 billion. Both exports and imports of services have grown steadily, with more than 50% over the last decade. The EU continues to invest in Indonesia with assets standing at around EUR 25 billion.

In 2023, the EU's foreign direct investment (FDI) stock in Indonesia amounted to €25.1 billion, while Indonesia's FDI stock in the EU was €1.1 billion. EU exporters are expected to gain from the immediate tariff removal that will bring European companies’ yearly duty savings of €600 million.

The agreement will expand opportunities for EU and Indonesia services suppliers and investors, and ensure a more predictable trade environment. It will in particular:

guarantee that EU service providers and investors in sectors identified in the agreement will not be discriminated vis-a-vis their Indonesian counterparts.
make it easier for EU operators to acquire the licenses or qualifications necessary to supply their services, through clear, fair, and timely processes.
ensure that EU service suppliers will not be required to have local presence (such as a branch) in Indonesia for certain sectors.
commit the EU and Indonesia to refrain from imposing restrictions in several sectors, including on the number of operators and the value of transactions.
improve regulatory conditions for services suppliers and investors.
pave the road for deeper business collaboration and a more efficient regulatory framework for services and investment.
facilitate the movement of professionals, by allowing services suppliers of the following categories to temporarily enter in both regions for business purposes.

The agreement opens opportunities for EU service providers in Indonesia in a wide range of sectors, such as:

Financial services
Postal services
Telecom
Maritime transport
Manufacturing, mining and renewable energy

While the FTA promotes trade and investment flows between the EU and Indonesia, it explicitly safeguards each party’s right to regulate in pursuit of legitimate policy objectives.

A separate Investment Protection Agreement between the EU and Indonesia includes rules on investment protection.

Capital movement, payments and transfers and temporary safeguard measures

If certain transaction is liberalised under the agreement – for example, setting up a foreign-owned business – then the money needed to carry out that transaction must also be allowed to move across borders. This could include things like the investor’s contribution to the company’s capital or payments related to trade in goods. Otherwise, the commitment to open up the transaction wouldn’t really work in practice. At the same time, both sides can still apply their own laws and rules where necessary, for example in cases of bankruptcy or when dealing with securities.

Digital Trade

The agreement creates a predictable, secure, and fair digital trade environment. It provides for binding rules that build consumer trust and ensure legal certainty for business and support innovation while maintaining the right to regulate for public policy, privacy, and security and deepening EU–Indonesia cooperation in the digital economy.

Key Outcomes

Data flows & privacy:
- Ensures free cross-border data flows by prohibiting unjustified localisation requirements.
- Recognises personal data protection and privacy as fundamental rights; each Party maintains autonomy over its own frameworks.
Trade facilitation:
- Prohibits customs duties on electronic transmissions (consistent with the WTO practice).
- Removes barriers by confirming that contracts, authentication, and trust services are legally valid when concluded electronically.
Consumer protection & trust:
- Requires effective safeguards against fraudulent or deceptive online practices.
- Ensures protection from unsolicited direct marketing communications.
- Promotes cooperation between consumer protection authorities.
Innovation & fairness:
- Prohibits forced transfer or disclosure of source code, while allowing justified access for regulatory, enforcement, or competition purposes.
- Encourages use of interoperable and transparent standards in cybersecurity.
Cooperation:
- Establishes dialogue on regulatory issues such as trust services or consumer protection.
- Supports SMEs in overcoming barriers to digital trade.
- Encourages participation in international fora to promote digital trade norms.

Government procurement

The agreement sets out rules ensuring that procedures to award public contracts are transparent, fair and non-discriminatory. As of entry into force, the deal guarantees

Transparent, fair and non-discriminatory procedures
Publication of all calls for tenders in a single electronic portal, which helps companies to identify economic opportunities
No discrimination based on foreign ownership: national treatment for all EU businesses established in Indonesia (and the same applies to Indonesian businesses established in the EU)
National treatment for all EU companies (independently of their place of establishment) for tenders funded by EU grants, loans and other EU assistance instruments.

Negotiations on market access will start within five years from entry into force of the CEPA.

Intellectual Property

The EU and Indonesia have agreed on the effective protection and enforcement of IP rights, which will:

promote the production and commercialisation of innovative and creative products
reduce barriers to trade.
help EU and Indonesian industries stay competitive.

The agreement includes provisions on:

copyright and related rights,
trademarks,
designs,
geographical indications (GIs),
patents,
protection of trade secrets and undisclosed information,
plant varieties

The comprehensive section on IPR enforcement includes measures, procedures and remedies to be provided by each Party to ensure the enforcement of intellectual property rights.

The IP Chapter also specifies relevant IP international agreements that the Parties are required to comply with.

Geographical Indications (GIs)

The CEPA provides direct protection for 221 EU and 72 Indonesian GIs, covering iconic agri-food products such as EU meats and cheeses and Indonesian spices and coffees. This high level of GI protection strengthens the export potential in high-value agri-food sectors, ensuring exclusive designation and helping producers market premium products.

Competition

Antitrust and mergers

The EU and Indonesia agreed that effective competition laws are to be maintained in both jurisdictions, which are implemented by operationally independent authorities.

These authorities are to act in a transparent and non-discriminatory manner, respecting the rights of defence. The agreement also foresees cooperation between the authorities.

Subsidies

The deal establishes a comprehensive transparency mechanism by which subsidies granted to both goods should be made public and upon request for subsidies granted to services providers.

The agreement also sets up E a consultation mechanism that will allow one Party to raise their concerns in case a subsidy is likely to affect trade negatively.

State-owned enterprises

State-owned and state-controlled enterprises (SOEs) play an important role in Indonesia. Often these SOEs are entrusted by the government to carry out particular tasks to reach legitimate public policy objectives that might entail favouring local business compared to European goods, services or EU-invested companies in Indonesia.

The SOE disciplines do not prevent the establishment of SOEs.
The CEPA will allow EU business to compete on a level playing field with such SOEs when they carry out commercial activities and address potential discrimination – and vice-versa.
It ensures that SOEs conduct their commercial activities according to normal commercial considerations, and in case of public policy objectives, they do not discriminate against the other side’s businesses.
It ensures that the regulatory framework is not biased and do not favour domestic SOEs.
A dedicated information exchange and a tailored technical consultation allows the EU and Indonesia to address early on concerns on possible adverse effects on their companies due to the commercial operations of the other side’s SOEs.
Ultimately, each Party can raise its concerns on the undue impacts of the operations of the other side’s SOEs under the CEPA dispute settlement mechanism.
The agreement defines the concept of state-owned enterprises in a comprehensive manner and includes control by the state by other means than direct ownership.
The most important central Indonesian SOEs are covered by these rules at entry into force. Dedicated periodic reviews allow to expand the covered SOEs, while the agreement-wide review clause also to updating the general rules as well.

Energy and Raw Materials

The CEPA is a major step in opening trade and investment and securing supply chains between the EU and Indonesia in energy and raw materials. The CEPA:

prohibits export monopolies for energy or raw materials,
complementing disciplines on export duties set in the Trade in Goods chapter, specifically for raw materials it bans dual pricing where export prices of raw materials would be set above domestic prices,
limits unjustified government interventions on price regulations for raw materials and creates a mechanism of transparency and bilateral exchange for such instances,
increases transparency and fairness of the licensing/authorisation processes for hydrocarbons, electricity and raw materials as a means to improve governance and investment conditions in the sectors,
ensures that both energy and raw materials investments respect the environment: the must be in line with the basic principles of the Arhus and Espoo conventions, related to environmental impact assessments and involvement of the general public in such process,
promotes and facilitates trade and investment in sustainable energy goods such as clean, renewable energy and energy efficient products, by addressing key technology-specific non-tariff barriers related to non-discriminatory access to and use of the grid overseen by an independent regulatory authority,
ensures that EU renewable suppliers’ companies are not discriminated against in their access to Indonesia energy grids,
caters for avenues of cooperation between EU and Indonesia to facilitate trade and investment linkages and on energy transition, on renewable fuels, and on raw materials, including to promote responsible business conduct and ESG standards in the raw materials value chains,
makes investments easier by removing unjustified barriers and specifically enabling waiver of local content restrictions for renewable energy investments.

Trade and Sustainable Growth and Development

The Agreement sets a comprehensive framework on trade and sustainable growth and development, which:

enhances environmental protection and addresses climate change
protects workers’ rights
supports women’s empowerment
provides for a platform for dialogue and cooperation on trade related environmental and climate issues, including in the palm oil sector
ensures an effective enforcement mechanism, including through trade measures as a last resort

It protects both parties’ right to regulate and prohibits the parties from weakening, waiving, or failing to enforce their laws in order to encourage trade or investment.

The Agreement also offers civil society organisations an active role to monitor the implementation of the agreement [see section 24].

Trade environment and climate – supporting global governance and the green transition

Both parties commit to the effective implementation of the Multilateral Environmental Agreements (MEAs) that each party has ratified, such as:

the Paris Agreement,
the Convention on Biological Diversity,
the Convention on International Trade in Endangered Species of Wild Fauna and Flora

The Agreement commits the EU and Indonesia to work together on climate change issues, such as carbon pricing, or transition to low-carbon economy, as well as on sustainable management of natural resources, including marine natural resources and forests. It also promotes cooperation to encourage the shift to a circular and resource-efficient economy.

The CEPA includes dedicated provisions on the protection and management of natural resources, setting commitments with respect to:

Forest conservation
Conservation and sustainable use of biodiversity
Combatting illegal wildlife trade
Combatting illegal logging and related trade
Combatting Illegal, Unreported, and Unregulated (IUU) fishing

Through its market access commitments, the deal will make trade and investment in low carbon goods, services, and technology easier.

This includes zero tariffs on green goods and liberalisation of services and investment sectors of relevance for the green transition, such as renewable energy, and energy efficient products, from the first day of application of the Agreement.

These goods, services and investment contribute to achieving environmental and climate goals by preventing, limiting, minimising or remediating environmental damage to water, air and soil and by contributing to the dissemination of technologies that serve to mitigate climate change.

Trade and workers’ rights

The deal requires the respect of the core International Labour Organization (ILO) principles covering subjects such as:

freedom of association and the right to collective bargaining,

the elimination of all forms of forced and compulsory labour,
the abolition of child labour,
non-discrimination at work,
a safe and healthy working environment.

The TSGD Chapter has a broad range of commitments and cooperation provisions on issues such as decent working conditions, labour inspection, social dialogue, the promotion of responsible business conduct.

Women’s empowerment

The CEPA contains provisions regarding the relevant UN and ILO conventions advancing women’s economic empowerment and gender equality, including promoting cooperation in international fora to advance these objectives.

Dialogue and cooperation

The chapter also includes a complementary set of provisions focused on dialogue and cooperation, on regulatory and other sustainability issues.

Enforceable commitments

Commitments on trade and sustainable growth and development are legally binding and enforceable through the Agreement’s dispute settlement mechanism.

Trade remedies are foreseen as a matter of last resort, in case of an on-going breach by a Party of the commitments to remain a party in good faith to the ratified fundamental ILO conventions and the Paris Agreement on Climate Change.

Protocol on Palm Oil

The Agreement includes a Protocol on Palm Oil, geared towards maximising the potential of CEPA to support trade in sustainable palm oil. It does so by, establishing a platform for dialogue, including on regulatory developments of relevance for the palm oil sector, and creating a framework to work more closely together in areas of specific importance for the sustainability of palm oil production and to facilitate trade in palm products.

Sustainable Food Systems

The CEPA creates a framework for the EU and Indonesia to cooperate on strengthening policies and defining programmes that contribute to the development of sustainable, inclusive, healthy and resilient food systems and to jointly engage in the transition towards sustainable food systems.

Economic Cooperation and Capacity Building

The Agreement sets out basic principles and operational guidelines for economic cooperation and capacity building in areas covered under its scope. These activities are rooted in the overall cooperation framework set under the EU-Indonesia Partnership and Cooperation Agreement.

Small and Medium-Sized Enterprises

The vast majority of companies in both the EU and Indonesia are small and medium-sized enterprises (SMEs).

The agreement has a chapter dedicated to SMEs and a number of other provisions which benefit small companies:

Both the EU and Indonesia will provide information on how to access and do business on each other’s markets, on one single publicly-accessible digital platform.
Both sides will set up SME contact points, who will cooperate in identifying ways for SMEs to benefit from the opportunities offered by the agreement. This will ensure that SMEs can easily access all relevant and up-to-date information on doing and setting up business in the other Party, enhancing their ability to benefit from the FTA.
Tariff reductions will boost exports for both EU and Indonesian businesses, including SMEs, on a range of industrial and agricultural products.
Removing regulatory barriers and promoting transparency will help reduce costs, streamline procedures, improve efficiencies, and provide business certainty and a stable regulatory environment, all benefitting especially SMEs who have less resource to deal with these issues.
EU SMEs will also benefit from predictable and transparent rules for digital trade, as well as the facilitation of cross-border data flows. Ambitious rules on the use of e-contracts, e-invoices and paperless trading will make it easier for SMEs, in particular, to operate.

Good Regulatory Practice

The CEPA promotes transparent, coordinated, and evidence-based regulations that respect domestic laws, support public policy goals, and consider the interests of businesses and stakeholders.

At the same time, each Party decides its own approach to regulatory practices. They are not required to change domestic procedures or delay important regulations. The rules apply only to central authorities (the European Commission and Indonesia’s central government), not local or regional bodies.

Good regulatory practice provisions concern all regulatory measures under the CEPA, including EU regulations, directives, and implementing acts, and Indonesian laws, government, presidential, and ministerial regulations.

Each Party must coordinate internally to ensure regulations are consistent, avoid duplication, and consider trade, investment, and small business impacts. Processes and methods for preparing regulations should be transparent and publicly available.

Parties must publish an annual list of major planned regulations, explaining their purpose and timelines.

Regulatory authorities are expected to assess the need for regulations, consider alternatives, and evaluate social, economic, environmental, trade, and investment impacts. Reports on these assessments should be made public as well.

Existing regulations should be reviewed regularly to find ways to improve effectiveness and reduce unnecessary burdens, particularly for small and medium-sized enterprises.

All active regulations must be listed in an online, searchable register. The EU and Indonesia should also share best practices and experiences in regulatory management.

Transparency

The Parties commit to ensuring a predictable and transparent regulatory environment that facilitates trade and investment, particularly benefiting small and medium-sized enterprises (SMEs). The provisions clarify how laws and regulations of general application should be published, administered, and reviewed, reinforcing commitments under the WTO Agreement.

Parties must publish laws, regulations, and other measures of general application promptly, ideally through electronic means. These publications should explain the objective and rationale of the measure and, wherever possible, allow sufficient time before entering into force. This ensures businesses and citizens can access and understand new rules in advance.
Mechanisms must be in place to respond to enquiries from the public, and Parties are expected to provide information to one another on existing or planned regulations. This fosters mutual trust and accessibility of information.
Measures must be applied objectively, impartially, and reasonably. Individuals or businesses affected by administrative proceedings should receive timely notice of proceedings and be given the chance to present facts and arguments before final decisions are made.
Parties must maintain judicial, arbitral, or administrative systems for reviewing administrative decisions. These processes must be impartial, independent, and based on proper evidence. Decisions must be respected and implemented by enforcement authorities, giving legal certainty and confidence to stakeholders.

These transparency rules apply across the agreement, supplementing specific provisions in other chapters, ensuring consistency and coherence.

The chapter enhances predictability, accountability, and fairness in trade-related regulation. By guaranteeing timely publication, open access to information, fair administrative processes, and independent avenues of appeal, it strengthens trust in regulatory systems and lowers uncertainty for businesses operating across borders.

Bilateral dialogue mechanism

The Agreement provides for a dedicated mechanism to foster awareness and mutual understanding of respective regulatory frameworks, with a view at enhancing transparency and predictability and facilitating trade and investment.

Dispute Settlement

The Agreement has a dedicated Dispute Settlement (DS) Chapter that sets up an efficient and effective mechanism for avoiding and settling any dispute between the Parties concerning the Agreement. The bilateral DS mechanism is inspired by the WTO DS system. The mechanism:

guarantees high-quality decisions taken by independent panellists;
ensures that the mechanism cannot be blocked or obstructed by one partner involved in the dispute;
provides for streamlined procedures and short deadlines, so any disagreement could be solved promptly; and
ensures transparency thanks to open hearings, publication of panel decisions, and possibility for interested parties to submit views in writing.
provides for possible temporary remedies (“sanctions”) in case of non-compliance with the panel report.

Institutional provisions

Dedicated government-to-government bodies will oversee the implementation of the CEPA and ensure its smooth functioning. In addition, the agreement gives civil society dedicated avenues to play a prominent role in its implementation.

Domestic advisory groups, representing EU and Indonesian independent civil society organisations, including non-governmental organisations, business and employers' organisations, and trade unions, will provide advice and recommendations to, respectively, the EU and Indonesia, on the implementation of the CEPA. This can cover all topics under the scope of the agreement, ranging from investment, to energy and raw materials, to trade and sustainable growth and development.

A Civil Society Forum will facilitate dialogue between civil society from both sides and with representatives of the EU and Indonesia, further enabling civil society groups to voice their views and provide input to discussions on how the agreement is being implemented.

INVESTMENT PROTECTION AGREEMENT

The EU-Indonesia Investment Protection Agreement is designed to protect European investments in Indonesia and vice versa, while still respecting each Party’s right to regulate.

It ensures that European companies’ assets are safeguarded against unfair treatment – for example, unjustified discrimination, expropriation without fair compensation, or denial of justice in local courts.

At the same time, the agreement makes clear that Parties fully keep the right to regulate in the public interest. This includes changing laws or regulations even if such changes negatively affect investors or their expected profits.

To avoid uncertainty, the agreement provides clear definitions of key terms like “fair and equitable treatment” and “indirect expropriation.” This gives investors clarity on their rights, while also protecting the Parties’ regulatory powers.

The EU-Indonesia investment protection agreement only provides protection for investments that are in accordance with domestic legislation. Companies are therefore legally bound by all the obligations contained in the domestic legislation of the host State, including environmental or labour protection or respect of human rights.

Any disputes arising from the agreement can be addressed through a state-to-state dispute settlement mechanism that guarantees the removal of inconsistent measures. This provides strong safeguards and a predictable business climate for investors, in line with what the EU already offers.

After the entry into force of the agreement, the EU and Indonesia will continue negotiations to add a modern, state-of-the-art system for settling investment disputes between investors and State, with the aim of concluding these talks within three years. These efforts will also reflect ongoing international reforms in this area.

This agreement ensures legal certainty, strengthens investor confidence, and underlines the shared commitment of the EU and Indonesia to modern standards of investment protection.

Next steps

The negotiated draft texts will be published shortly. These texts will go through legal revision and translation into all official EU languages. The European Commission will then put forward its proposal to the Council for the signature and conclusion of the CEPA and the IPA. Once adopted by the Council, the EU and Indonesia can sign the agreements.

Following the signature, the texts will be transmitted to the European Parliament for consent. After the consent by the European Parliament, and once Indonesia also ratifies them, the CEPA and IPA can enter into force.