Indonesia and Canada Unite in Major Economic Pact
Jakarta, Indonesia – In a move to bolster economic ties, Indonesia and Canada inked a Comprehensive Economic Partnership Agreement (CEPA) on Monday. The agreement, the result of three years of negotiations, is set to come into effect in 2026 and marks a significant step forward for both G20 members.
Strengthening Ties through Critical Minerals and Green Growth
Indonesian Trade Minister Budi Santoso expressed gratitude for Canada’s backing of Indonesia’s plan to prioritize its critical minerals sector, deeming it crucial for sustainable growth. “Together, we advance sustainable critical mineral management, supporting Indonesia’s net zero target by 2060, and fostering Canadian investment while driving green growth in both nations,” Santoso stated during a joint press conference.
Indonesia boasts abundant reserves of tin, copper, bauxite, and other essential minerals. Its position as the world’s largest source of nickel ore makes it a key player in the global push towards electric vehicle battery production. Attracting investment to bolster the processing of these minerals and their integration into electric vehicle battery manufacturing is a top priority for Indonesia.
This focus on critical minerals aligns with Indonesia’s pursuit of a sustainable future. The country has already received overtures from the United States to join a multinational mineral security partnership aimed at accelerating the development of sustainable critical mineral supply chains. Additionally, Indonesia secured an agreement with Britain in September to collaborate on critical minerals, highlighting the growing importance of this sector in global relations.
Expanding Trade and Investment Opportunities
The agreement is expected to significantly boost trade between the two countries. Two-way trade between Indonesia and Canada reached $3.4 billion last year, according to Indonesia’s trade ministry. Canada estimates bilateral trade to be around $5.1 billion in 2023.
Currently, Canada’s main exports to Indonesia consist of agricultural products and fertilizers, while Indonesia primarily exports machinery, electrical machinery, garments, and footwear. The CEPA is expected to diversify these trade flows and create new opportunities for businesses in both countries.
Seeking Broader Collaboration
The signing of the CEPA follows a meeting between Canadian Prime Minister Justin Trudeau and Indonesian President Prabowo Subianto during the Asia-Pacific Economic Cooperation (APEC) leaders’ summit in Peru last month. President Subianto expressed interest in exploring further cooperation in areas such as fisheries, manufacturing, and renewable energy, indicating a desire to expand the bilateral partnership beyond trade.
– What specific provisions in the Indonesia-Canada CEPA aim to promote sustainable mining practices and combat potential environmental damage?
## Indonesia Eyes Greener Future with Canada Partnership
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**Host:** Welcome back to “Global Trade Talk,” where we dissect the latest developments in international commerce. Today, we’re diving into a major development in Southeast Asia: the newly inked Comprehensive Economic Partnership Agreement (CEPA) between Indonesia and Canada. Joining us to unpack this deal is Dr. Amelia Chandra, an expert on Southeast Asian economics at the Institute of Asian Studies. Dr. Chandra, welcome to the show.
**Dr. Chandra:** Thank you for having me.
**Host:** So, this CEPA, it’s been in the works for a while, right?
**Dr. Chandra:** Yes, negotiations have been ongoing for three years, and the agreement was finally signed this Monday.
**Host:** What makes this partnership so significant?
**Dr. Chandra:** This agreement is truly groundbreaking for both countries. It signifies a deepening economic relationship between two key G20 members. For Indonesia, it’s a major win in terms of securing access to the Canadian market for its goods, with tariffs on up to 90.5% of its exports being liberalized. [[1](https://asiatoday.id/read/ica-cepa-effective-in-2026)]
**Host:** And what about the Canadian side of this deal?
**Dr. Chandra:** Canada gains a reliable source of critical minerals, something they’ve identified as key to their own green energy transition. Indonesia is rich in resources like nickel, which is essential for electric vehicle batteries.
**Host:** Interesting you mention that, because the Indonesian Trade Minister highlighted “green growth” as a key focus of this partnership.
**Dr. Chandra:** Absolutely. Indonesia is aiming to be carbon-neutral by 2060, and Canada is committed to transitioning to a clean energy economy. This CEPA facilitates collaboration and investment in sustainable mining practices and clean technologies, which aligns perfectly with both nations’ goals.
**Host:** Any potential challenges or concerns on the horizon for this new partnership?
**Dr. Chandra:** Like any major trade agreement, there will always be hurdles to overcome. Ensuring responsible and sustainable mining practices in Indonesia will be crucial.
**Host:** Wise words to wrap up our discussion. Dr. Chandra, thank you for shedding light on this exciting new chapter in Indonesia-Canada relations.
**Dr. Chandra:** My pleasure.
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