Indonesia signs economic partnership agreement with Canada

Indonesia has recently established a Comprehensive Economic Partnership Agreement (CEPA) with Canada, signed in Jakarta by the trade ministers of both nations. This agreement, which aims to enhance economic collaboration between the two G20 countries, is set to take effect in 2026, three years after negotiations initially commenced. Indonesia's Trade Minister, Budi Santoso, highlighted the importance of Canada's backing for Indonesia’s initiative to focus on its critical minerals sector. This sector is deemed essential for Indonesia’s sustainable economic growth and aligns with its goal to achieve net zero emissions by 2060. Canada has shown interest in supporting Indonesia’s mineral extraction and processing capabilities, particularly as Indonesia possesses significant deposits of tin, copper, and bauxite, with nickel ore being the most notable. The country seeks to boost domestic value extraction from these minerals by attracting investment for processing and the manufacturing of electric vehicle batteries. In addition to Canada, Indonesia is engaging with other countries, such as the United States and Britain, to enhance its capabilities in sustainable mineral supply chains. Last year, two-way trade between Indonesia and Canada reached $3.4 billion, with Canada projecting that this figure could grow to $5.1 billion in 2023. The primary exports from Canada to Indonesia include agricultural products and fertilizers, while Indonesia mainly ships machinery, electrical machinery, garments, and footwear to Canada. This partnership and the cooperation mentioned by Indonesian President Prabowo Subianto during a recent summit with Canadian Prime Minister Justin Trudeau reflect an ongoing commitment to explore collaboration in various sectors, including fisheries, manufacturing, and renewable energy.