ICA-CEPA expands market access and investment opportunities after years of negotiations
Indonesia and Canada have officially concluded the Indonesia–Canada Comprehensive Economic Partnership Agreement (ICA-CEPA), eliminating tariffs on 95% of traded goods and opening broader opportunities for bilateral trade and investment.
The agreement, launched on June 24, 2026 following years of negotiations, aims to improve market access for businesses in both countries while strengthening cooperation in manufacturing, renewable energy and other strategic sectors.
The tariff elimination is expected to enhance the competitiveness of Indonesian exports to Canada, particularly palm oil, textiles, electronics and higher-value agricultural products, which previously faced tariffs of up to 15%.
Bilateral trade between Indonesia and Canada reached US$2.8 billion in 2025, including US$1.5 billion in Indonesian exports. The government expects the agreement to support further growth in trade and investment in the coming years.
Investment opportunities
Beyond tariff reductions, ICA-CEPA establishes a more predictable framework for investment, with Canada expected to expand its presence in sectors including manufacturing, renewable energy and information technology.
The agreement also supports closer industrial cooperation, with Canadian expertise in green technology, sustainable mining and advanced manufacturing expected to complement Indonesia’s downstream industrial development.
Officials expect stronger investment flows and technology transfer to support Indonesia’s broader economic growth strategy.
Domestic industries seek safeguards
While exporters have welcomed wider access to Canada’s market, some domestic industries have raised concerns over increased competition from Canadian imports.
Agricultural groups, in particular, have urged the government to strengthen support for local producers that could face greater competition following tariff reductions.
The government said it would improve domestic competitiveness through research and development, workforce training and industrial modernization while encouraging partnerships between Indonesian and Canadian companies.
