Benefits and opportunities for the Canadian agriculture and agri-food sector under the Canada-Indonesia Comprehensive Economic Partnership Agreement (CEPA)

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Overview of the agricultural and agri-food sector in Indonesia

As one of the largest consumer markets in Asia, Indonesia has a steadily growing economy and an increasing demand for high-quality imported food. In 2024, Indonesia’s total agri-food and seafood imports were $39.0 billion, which showed growing consumer preferences for international products. Indonesia was Canada’s 6th largest agri-food and seafood export market in the world and the largest among ASEAN members in 2024, valued at $1.2 billion, with strong potential for further growth.

Consumer behaviour in Indonesia is influenced by its diverse culinary traditions, rapid urbanization, and a growing interest in healthy living. Indonesian consumers prefer fresh, high-quality food, with growing demand for premium meat cuts, plant-based proteins, dairy alternatives, and organic produce. There is also strong interest in processed food products that align with modern lifestyles, including ready-to-eat meals and functional health foods.

Canada is well positioned to expand exports of key agricultural products already consumed in Indonesia, such as beef, wheat, soybeans, peas, potatoes, pet food, and packaged and prepared foods. Additionally, Canada’s strong reputation for food safety and sustainable farming practices enhances the appeal of its exports. This appeals to Indonesian buyers looking for high-quality and traceable food products.

Current tariff landscape and tariff outcomes under the CEPA

Prior to the CEPA, Canadian agriculture and agri-food exports to Indonesia were subject to an average tariff rate of 8.6%. These elevated tariffs limited the competitiveness of Canadian products in the Indonesian market. Key products in high demand faced tariffs ranging from 5% to 30%, such as beef, canola, pulses, and potatoes. Prepared and packaged food items were subject to tariffs of up to 20%, including chocolate, sugar confectionery products, baked goods, and pet food.

The CEPA secures duty-free access under the Most-Favoured-Nation (MFN) status for wheat and soybeans, Canada’s primary agricultural exports to Indonesia. This will ensure tariffs remain stable in the long-term. The Agreement eliminates or significantly reduces duties on key agricultural commodities, improving cost efficiency for Canadian exporters:

  • Beef
    • Indonesia to eliminate tariffs of 5% on all fresh and frozen beef cuts and offal within 5 years.
    • Indonesia to eliminate tariffs of 30% on most prepared and preserved beef within 5 years.
  • Pork
    • Indonesia to eliminate tariffs of 5% on most fresh and frozen pork carcasses, cuts, and offal upon entry into force.
    • Indonesia to eliminate tariffs of 30% on most prepared and preserved pork within 5 years.
  • Soybeans
    • Indonesia to lock in (bind) MFN duty-free treatment for soybeans.
    • Indonesia to eliminate tariff of 5% on crude and refined soybean oil upon entry into force.
    • Indonesia to eliminate tariffs of up to 5% on soybean meal upon entry into force.
  • Canola
    • Indonesia to eliminate tariff of 5% on canola seed within 10 years.
    • Indonesia to eliminate tariff of 5% on crude and refined canola oil upon entry into force.
    • Indonesia to eliminate tariff of 5% on canola meal within 10 years.
  • Wheat
    • Indonesia to lock in (bind) MFN duty-free treatment for wheat for human consumption.
    • Indonesia to eliminate tariff of 5% on feed wheat upon entry into force.
  • Other cereals
    • Indonesia to lock in (bind) MFN duty-free treatment for barley.
    • Indonesia to eliminate tariffs of 5% on oats within 5 years.
    • Indonesia to eliminate tariff of 5% on malt (roasted and unroasted) upon entry into force.
    • Indonesia to eliminate tariff of 5% on canary seed.
  • Fruits
    • Indonesia to eliminate tariff of 5% on fresh blueberries and cranberries upon entry into force.
    • Indonesia to eliminate tariff of 5% on fresh cherries within 5 years.
    • Indonesia to eliminate tariff of 5% on frozen, blueberries, cranberries and cherries within 5 years.
    • Indonesia to eliminate tariff of 5% dried cranberries upon entry into force.
  • Pet food
    • Indonesia to eliminate tariff of 5% on dog and cat food upon entry into force.
    • Indonesia to eliminate tariffs of up to 5% all other animal feed within 10 years.
  • Potatoes
    • Indonesia to eliminate tariff of 20% on chipping potatoes within 15 years.
    • Indonesia to lock in (bind) MFN duty-free treatment for seed potatoes.
    • Indonesia to eliminate tariff of 5% on frozen French fries upon entry into force.
  • Pulses
    • Indonesia to eliminate tariff of 5% on dry peas, lentils, chickpeas and adzuki beans upon entry into force.
    • Indonesia to eliminate tariff of 5% on pulse protein concentrates and isolates within 10 years.
  • Prepared and packaged foods
    • Indonesia to eliminate tariffs of up to 20% on most sugar confectionery products.
    • Indonesia to eliminate or reduce tariffs of up to 20% on most chocolate products within 15 years as well as tariffs on key chocolate products eliminated upon entry into force.
    • Indonesia to eliminate tariffs of up to 20% on all baked goods upon entry into force.

Under the Agreement, Canada did not provide any market access concessions for supply managed goods (i.e., dairy, poultry and egg products) that are subject to import controls.

The CEPA gives Canadian farmers and food producers the same or better access to the Indonesian market as competitors like Australia and the European Union. By cutting tariffs, the deal helps make Canadian agricultural products more affordable and competitive.

Import licensing

The CEPA’s provisions on import licensing under the National Treatment and Market Access for Goods chapter will provide greater transparency and predictability for Canadian agricultural exporters and commit Indonesia to issue import licenses automatically for products such as beef and potatoes.

Halal certification

Indonesia’s halal requirements are central to food trade, given the country’s large Muslim population and existing domestic regulations. Indonesia has authorized two private halal certification bodies in Canada to certify Canadian agricultural products to meet Indonesia’s halal requirements.  These efforts improve access to the growing Indonesian market for halal foods.

Sanitary and phytosanitary measures

The CEPA establishes a Committee on Sanitary and Phytosanitary (SPS) Measures to foster technical cooperation between Canada and Indonesia and to address trade irritants. Further, the Chapter creates robust and comprehensive obligations on how the Parties take SPS measures, so that they do not function as unjustified barriers. This includes obligations on risk analysis, transparency, import checks, and certification.  The CEPA is subject to dispute settlement and creates a new mechanism to resolve issues cooperatively by government officials.

The CEPA maintains the sovereign right of Canada and Indonesia to take SPS measures necessary to protect the life and health of humans, animals or plants, and to establish their individual appropriate level of protection, while committing to avoid unnecessary barriers to trade.

Rules of origin and origin procedures

The CEPA’s Rules of Origin and Origin Procedures chapter provides clear criteria and simplifies the documentation required for determining product origin, which ensures that qualifying Canadian agricultural exports receive preferential tariff treatment. These provisions help exporters maximize the benefits of CEPA, making trade between Canada and Indonesia more efficient.

Customs procedures and trade facilitation

With the World Trade Organization Agreement on Trade Facilitation as a foundation, the CEPA establishes commitments that promote greater predictability, consistency and transparency in customs matters. Canadian exporters in the agriculture and agri-food sector will benefit from efficient customs procedures when shipping to Indonesia. Provisions including automated border processing, risk-based border inspections, and advance customs rulings for the tariff classification, customs valuation, and origin of goods will help ensure that perishable goods move efficiently across borders with minimal delays.

Trade in services

The CEPA enhances predictability and regulatory transparency for Canadian agricultural sector service providers. Canadian agricultural sectors are likely to benefit from the CEPA in related services sectors such as agricultural engineering, food engineering and research and development.

Investment

The CEPA’s Investment chapter strengthens protections for Canadian agri-food investors seeking opportunities in food processing, agri-tech innovation, and many other key sectors. The Agreement ensures the non-discriminatory treatment of investors and their investments and provides protection from expropriation without compensation. Additionally, Canadian firms benefit from access to investor-state dispute settlement (ISDS), which provides an impartial legal recourse in case of investment disputes and helps contribute to a stable investment environment.

Temporary movement of natural persons

The CEPA facilitates business travel and enhances transparency for agricultural specialists working in Indonesia’s market. These provisions support business mobility and foster cross-border collaboration in the agri-food sector. 

Provincial and territorial interests

The CEPA presents significant benefits for Canadian provinces with strong agricultural and agri-food export industries. The list below highlights the agricultural sectors in Canadian provinces that are expected to benefit the most from the Agreement:

  • Alberta: beef, canola, pulses, wheat, potatoes, frozen french fries, petfood, chocolate/confectionery/baked goods.
  • Saskatchewan: beef, canola, pulses, wheat.
  • Ontario: beef, pork, soybeans, petfood, chocolate/confectionery/baked goods.
  • Quebec: pork, soybeans, cranberries, petfood, chocolate/confectionery/baked goods.
  • Manitoba: pork, canola, pulses, wheat, soybeans, potatoes, frozen french fries.
  • New Brunswick and Prince Edward Island: potatoes, frozen french fries, blueberries.
  • British Columbia: cherries, blueberries, cranberries, petfood, chocolate/confectionery/baked goods.
  • Nova Scotia: blueberries.

Additional Information

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