EU Indonesia trade agreement: GSP preferences end on 1 January 2027

THURSDAY, 5 NOVEMBER 2026

Jakarta aims to sign in November and apply the deal from January, when Indonesia leaves EU preferences. At stake: 18.7 billion euro of EU imports and duties removed on over 98% of tariff lines.

EU Indonesia trade agreement: Jakarta is aiming for signature in November and application from January 2027. The date matters because on 1 January 2027 Indonesia leaves the EU's Generalised Scheme of Preferences (GSP), and importers of Indonesian goods lose the duty reductions they enjoy today.

EU Indonesia trade agreement: where it stands

On 30 October Indonesia's trade minister, Budi Santoso, said he hoped the Comprehensive Economic Partnership Agreement (CEPA) would be signed in November and applied from January 2027. Negotiations closed on 23 September 2025. On 29 June 2026 the European Commission sent the Council its proposals for signing and concluding the trade agreement and the separate investment protection agreement.

Three steps remain: Council approval for signature, the consent of the European Parliament and ratification in Indonesia. Jakarta's timetable is therefore a political target, not a fixed date.

The numbers behind the deal and the trade

• Duties removed: on over 98% of tariff lines and close to 100% of trade value, according to the European Commission.
• Liberalisation at entry into force: 80%, rising to 96% of trade after a five-year transition.
• EU goods imports from Indonesia: 18.7 billion euro in 2025, against 17.5 billion in 2024.
• EU goods exports to Indonesia: 10.2 billion euro in 2025, for total goods trade of 28.9 billion.
• Exit from the GSP: from 1 January 2027, for all Indonesian goods and not just some sections of the tariff.

Why Indonesia loses the GSP

The Generalised Scheme of Preferences grants reduced or zero duties on imports from developing countries. A country leaves it once the World Bank classifies it as an upper-middle-income economy for three consecutive years. For Indonesia that happened in 2023, 2024 and 2025, so the European Commission has stated that from 1 January 2027 all Indonesian goods will lose GSP preferences.

The CEPA is meant to replace the GSP with a broader and more stable regime, because a bilateral agreement does not depend on income classification. European associations in the most exposed sectors, such as sportswear and footwear, have been asking for a year for a seamless handover between the two regimes.

The risk of a gap

If the CEPA does not enter into force on 1 January, Indonesian goods face a period in which the full duty applies, the rate charged to all countries without an agreement with the EU. The sources do not say how long that could last: it depends on the timing of the Council, the European Parliament and Indonesian ratification.

The data does not prove there will be a gap, but it signals that less than two months before the deadline, signature, European Parliament consent and ratification are still to be completed. It is worth treating the first months of 2027 as an uncertain period rather than simple continuity.

What it means for importers into Italy and Europe

Anyone buying textiles, clothing, footwear, furniture, wood or rattan items, components or promotional products from Indonesia should run three checks before December.

The first is on the customs code of each product: compare, in the EU integrated tariff, the GSP duty paid today with the full duty. For some headings the difference is small, for others it weighs on the selling price, and it is better to know before confirming orders for January.

The second concerns contracts. Duty is calculated on the date the customs declaration is accepted, not the order date: a shipment leaving in November and cleared in January may pay the full duty. It is worth bringing forward clearances where possible and agreeing with the supplier who bears any extra cost.

The third is origin. Under the CEPA, preferences apply only to products substantially processed in Indonesia or the EU, and proof of origin is based on self-certification by companies. A product assembled in Indonesia from parts made elsewhere may not qualify for the reduced duty: it is worth asking the supplier now for the bill of materials and where each part comes from.

Indonesia, GSP until 31 December: how to prepare

With La Merce, importers from Indonesia reach 1 January 2027 with customs codes already compared between GSP and full duty, December shipments planned for clearance within the year and origin documents ready for the new agreement.

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