Indonesia-European Union CEPA enters key approval phase: Minister

Indonesia is emerging as a pivotal player in the Southeast Asian steel industry, according to officials from the Indonesian Iron and Steel Industry Association (IISIA). At the Mysteel 2026: 1st Southeast Asia Steel Industry Summit, IISIA chairman Akbar Djohan emphasized that Indonesia's robust economic foundation, rising domestic demand for steel, and expanding downstream investments position the nation as a critical partner for regional steel development. He highlighted that Southeast Asia, including Indonesia, holds some of the most promising growth opportunities in the global steel industry. As the largest economy within the Association of Southeast Asian Nations (ASEAN), Indonesia is seen as having substantial potential to draw foreign investments and forge strategic alliances in the iron and steel sector.

Djohan underscored that the continuous increase in domestic steel usage and improved export performance reflect the growing competitiveness of Indonesia's steel industry on the world stage. Despite global economic instability, geopolitical changes, and the shift towards a low-carbon economy, he argued that collaboration is essential for maintaining the industry's strength. No single entity, whether a country, corporation, or organization, can manage these transformations independently, he said. Instead, stakeholders must share knowledge, promote innovation, build partnerships, and establish mutual trust to shape the future of the steel industry.

The summit aimed to facilitate new collaborations and investments that would elevate the national steel industry's competitiveness. These efforts align with the government's downstreaming and industrial transformation agenda outlined in President Prabowo Subianto’s eight priority programs, known as Asta Cita. Djohan also emphasized the need to create a fair competitive environment and accelerate the transition to a green steel ecosystem, which involves cooperation among the government, industry players, financial institutions, technology firms, and the energy sector.

In parallel developments, Indonesia is making strides in international trade agreements, particularly with the European Union. Coordinating Minister for Economic Affairs Airlangga Hartarto announced significant progress in discussions regarding the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEUCEPA). The European Commission has submitted a conclusion proposal to the EU Council, marking a crucial step in long-term negotiations. This includes the Investment Protection Agreement (IPA), which is vital for enhancing trade and investment relations between the two regions.

Airlangga noted that President Prabowo Subianto sees this advancement as a transformative moment for the global market. As the largest economy in Southeast Asia, Indonesia is well-positioned to collaborate with the European Union to expand markets and stimulate broader economic growth across Europe and the Indo-Pacific region. The agreements now await approval from the EU Council before moving to the European Parliament for final endorsement and implementation.

Indonesia aims to complete the ratification process for IEUCEPA by the second half of 2026, allowing for implementation by early 2027. Under the agreement, the EU plans to remove import duties on 98.5 percent of tariff lines, streamline procedures for Indonesian exports, and explore investments in strategic sectors such as electric vehicles, electronics, and pharmaceuticals. Additionally, the agreement seeks to protect intellectual property rights and strengthen supply chain resilience.

On another front, Indonesia's food products have gained traction in international markets. At the Food Taipei Mega Show 2026, Indonesian food products secured potential transactions worth approximately $5 million. This success highlights the growing recognition of the quality, added value, and competitiveness of Indonesian food items in the Taiwanese market. The Ministry of Trade attributed this achievement to the collaborative efforts of various stakeholders, including the Indonesian Economic and Trade Office in Taipei, the Ministry of Trade itself, and the Indonesian Food and Beverage Producers Association (Gapmmi).

The showcase featured over 20 Indonesian businesses presenting a diverse array of high-quality, innovative, and value-added food products, ranging from edible bird's nests and seafood to low-calorie noodles, honey, coffee, spices, and processed fishery goods. The trade volume between Indonesia and Taiwan reached $3.10 billion during the first four months of 2026, with Indonesia recording a trade surplus of $80 million. In 2025, the total trade between the two countries amounted to $9.95 billion, with Indonesia posting a $1.13 billion trade surplus.

Domestically, Indonesia continues to focus on economic expansion and industrial development. Several companies are preparing for initial public offerings (IPOs), signaling increased investor interest in the local market. Meanwhile, the government expresses confidence in achieving an 8 percent economic growth rate, reflecting optimism about the nation's economic trajectory amid ongoing reforms and international engagement.