September 26, 2025
JAKARTA – Indonesia and Canada signed a landmark trade deal during President Prabowo Subianto’s state visit to Ottawa on Wednesday, marking Canada’s first-ever trade agreement with an ASEAN nation.
Canadian Prime Minister Mark Carney hailed the Canada-Indonesia Comprehensive Economic Partnership Agreement (CEPA) as a “game-changing” pact that will fundamentally reshape trade between the two nations.
The CEPA, set to take effect in 2026, is expected to create a more predictable environment for investment in critical sectors such as clean technology, critical minerals and financial services.
The agreement is also projected to eliminate or drastically reduce tariffs on more than 95 percent of Canadian exports, making key commodities like wheat, potash and agri-food products far more competitive in Indonesia’s vast market.
“In this new era, our partners will no longer rely only on the strength of our values but also the value of our strength,” Carney said in a statement issued on Wednesday.
At the same time, Canada welcomed Indonesia’s support for the Canada-ASEAN Free Trade Agreement as well as its interest in acceding to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Organisation for Economic Co-operation and Development (OECD).
“The global trade landscape is rapidly changing as the United States fundamentally transforms all of its trading relationships […] We are building our strength at home, diversifying our partnerships abroad and creating a web of new connections to pursue our interests,” Carney added.
In a sign that economic growth is now seen as inseparable from regional security, the leaders also announced a new defense cooperation agreement. Building on recent military talks, the pact will deepen collaboration on maritime security, cyber defense and peacekeeping efforts.
“It is a critical step in Canada’s Indo-Pacific Strategy,” Carney said, emphasizing that the economic and security agreements send a strong message of shared commitment to peace and stability in a rapidly evolving geopolitical landscape.
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In 2024, Indonesia was Canada’s third-largest merchandise trading partner among Southeast Asian countries, with trade totaling US$5.6 billion. Canadian merchandise exports to Indonesia were valued at $2.3 billion, making it Canada’s largest export market in Southeast Asia and its 18th largest worldwide.
Beyond tariff reductions, the partnership was reinforced by a major financial commitment. Export Development Canada (EDC) will provide up to CAD$825 million ($594 million) in debt financing to the Indonesia Investment Authority (INA).
Under the agreement, EDC has allocated financing for Indonesia’s sovereign wealth fund, particularly for projects in priority sectors such as infrastructure, clean technology, renewable energy, agriculture and food.
The MoU outlines financing solutions and joint opportunities linking Canada and Indonesia across these sectors, leveraging “EDC’s global financing capabilities and INA’s deep local insight.”
In September 2023, EDC opened its Jakarta office to tap into what it called “significant opportunities” for Canadian exporters and investors.
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Recognizing Indonesia’s projected ascent to one of the world’s top five economies by 2050, business leaders also strengthened ties.
The Business Council of Canada and the Indonesian Chamber of Commerce and Industry (Kadin) signed an agreement to bolster corporate alliances through trade missions and network building.