Trade Minister Explains Why Free Trade With Canada Is Important to Sustain Indonesia’s Economic Momentum

Jakarta, CNBC Indonesia — The Indonesian government is accelerating the ratification of the Indonesia-Canada Comprehensive Economic Partnership Agreement (ICA-CEPA) to open Indonesian export access to Canada. This step forms part of efforts to diversify export markets amid mounting global trade tensions.

‘Global geopolitical uncertainty and rising trade protectionism through higher tariffs and technical regulations have the potential to limit access to Indonesian products’ markets and dampen national export performance,’ said Trade Minister Budi Santoso at the DPR building, Tuesday, 19 May 2026.

The government sees Canada not merely as an ordinary export market. The country is viewed as a gateway to the broader North American market with high purchasing power and a relatively open trading system.

‘That Canada is a strategic entry point for products to the North American market with potential access to a market of around 500 million people, while also serving as a valuable distribution route amid the dynamics of US tariffs,’ he said.

Under the agreement, Indonesia gains tariff elimination of 90.55% or covers 6,573 Canadian tariff lines. Benefiting products include textiles, footwear, processed foods, seafood, and wood products.

‘ICA-CEPA offers tariff advantages, reduction of trade barriers, and opportunities to increase Indonesia’s value-added products,’ said Budi.

In addition to goods trade, the agreement also covers services, investment, digital trade, and government procurement. On the other hand, the government is preparing measures to ensure domestic industries are not squeezed by imports of Canadian products.

Overall, ICA-CEPA will strengthen Indonesia’s position in North America through the removal of the majority of tariffs, creating opportunities to boost Indonesia’s exports to Canada,’ said Budi.