The European Commission submitted proposals to the European Council on Monday for the signing and conclusion of the Comprehensive Economic Partnership Agreement (CEPA) and the Investment Protection Agreement (IPA) between the European Union and Indonesia.

These agreements are designed to strengthen trade and investment relations while diversifying the strategic partnerships of the EU.

According to a statement released by the commission, the two agreements represent a significant step in implementing the strategy of the EU to broaden commercial and investment ties with key international partners.

The pacts are expected to create new export opportunities and enhance the security of supply chains within the energy and raw materials sectors.

The commission highlighted that Indonesia, with a population of approximately 280 million, is one of the largest economies in the Indo-Pacific region.

The CEPA and IPA have been structured to offer substantial benefits to businesses based in both the EU and Indonesia.

The agreements provide for the removal of import tariffs on 98.5 per cent of tariff lines, alongside the simplification of export procedures for European products, including agri-food goods.

Simultaneously, the deal creates new opportunities for European firms to invest in Indonesia, particularly in the sectors of electric vehicles, electronics and pharmaceutical products.

The commission also stated that the agreements provide for the protection of intellectual property rights, including 221 geographical indications of the EU.

Furthermore, the deals include measures to strengthen predictable and reliable supply chains through the reduction of duties and the facilitation of exports of critical raw materials.

The commission has now requested that the council approve the signing of the two agreements.

Following this, the CEPA and the IPA must receive the consent of the European Parliament before their final conclusion and entry into force.

In parallel, the competent authorities of Indonesia are proceeding with their own internal ratification processes for the agreements.