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Canada Seals Indonesia Trade Deal, Pairing Tariff Cuts With Finance and Defence Pacts

Ottawa frames the pact as a cornerstone of a broader Indo-Pacific diversification strategy.

Overview

  • Once implemented, the CEPA cuts or eliminates tariffs on over 95% of current Canadian exports to Indonesia, while AFP reports more than 90% of tariffs on Indonesian imports into Canada will also be removed.
  • Export Development Canada will make up to $825 million in debt financing available to the Indonesia Investment Authority under a new Market Leader Partnership.
  • Canada and Indonesia signed a Defence Cooperation Agreement to expand collaboration on military training, maritime security, cyber defence and peacekeeping.
  • Officials expect ratification within about a year with entry into force in 2026, and the trade minister said bilateral trade could double within six years.
  • The agreement is positioned as part of Canada’s Indo-Pacific push, with Indonesia identified as its largest export market in Southeast Asia and further outreach signaled toward the Philippines and China.