MONTREAL: Canada has finalised a bilateral free trade agreement with Indonesia designed to eliminate or reduce tariffs on more than 95% of Ottawa’s exports to its largest market in Southeast Asia.
Experts indicate the strategic pact responds to global economic instability intensified by United States protectionist policies.
Canadian Prime Minister Mark Carney described the deal as the right agreement at the right time with the right partner.
He confirmed Indonesia stands as Canada’s largest export market in the Southeast Asian region.
Indonesian President Prabowo Subianto hailed the signing during his Ottawa visit as a historic moment.
Prabowo expressed his fortune in being the president to secure this first-of-its-kind agreement with an ASEAN member nation.
Key Canadian exports covered by the pact include wheat, potash, timber, and soybeans.
The Comprehensive Economic Partnership Agreement (CEPA) bolsters Canada’s Pacific presence, continuing a strategy initiated by the previous Justin Trudeau administration.
Indonesian imports will also benefit from the removal of over 90% of tariffs under the deal.
This tariff elimination will significantly aid Indonesian exports of garments and leather goods to the North American market.
A separate defence cooperation accord was signed concurrently to enhance collaboration in military training and maritime security.
The defence agreement also covers strengthened cooperation in cyber defence and peacekeeping operations.
This signing occurred shortly after Jakarta concluded a separate trade agreement with the European Union following nearly ten years of negotiations.
An analyst observed that securing two major trade deals within one week increases Indonesia’s resilience to tariff volatility.
Economist Syafruddin Karimi from Andalas University said the agreements signal a partner diversification strategy to minimise global tariff risks.
He clarified that this strategy does not indicate Indonesia is abandoning the United States market. – AFP
