On this page
- Mineral and chemical products opportunities in Indonesia
- Current tariff landscape and tariff outcomes under the CEPA
- Technical barriers to trade
- Customs procedures and trade facilitation
- Rules of origin and origin procedures
- Trade in services
- Intellectual property
- Investment
- Temporary movement of natural persons
- Provincial and territorial interests
Mineral and chemical products opportunities in Indonesia
Chemical products are vital to Indonesia’s manufacturing, agriculture, and infrastructure sectors, with total imports of chemicals, rubber, and plastics exceeding $48.3 billion in 2024. The country is one of the world’s largest consumers of industrial chemicals and fertilizers, driven by rapid population growth, expanding agribusiness, and industrial development. Canada currently exports approximately $493 million (2024) in chemicals, plastics, and rubber products annually to Indonesia, with a focus on potassium-based fertilizers and pharmaceutical raw materials. The CEPA offers a strategic advantage for Canadian suppliers looking to increase their presence in Indonesia.
Indonesia relies also on metals and minerals imports for infrastructure development and industrial processing, with total mining-related imports valued at approximately $43.7 billion annually. Canada is a leading exporter of iron ore and other mined minerals, and exports of metals and minerals to Indonesia amounted to nearly $53.5 million in 2024. The CEPA presents new opportunities for Canadian firms to expand their sales of iron ore, processed minerals, and critical metals.
Indonesian buyers prioritize cost-effective and high-quality chemical products, creating demand for Canadian sulphur for refining, potassium for fertilizers, and pharmaceutical-grade ingredients for healthcare and pharmaceutical manufacturing. Environmental regulations in Indonesia are also driving demand for cleaner and more sustainable chemical solutions, which aligns well with Canada’s expertise in eco-friendly industrial chemicals.
Current tariff landscape and tariff outcomes under the CEPA
Before the CEPA, Canadian mineral and chemical exports faced tariffs that range from 0-15%. The CEPA will lock in the duty-free treatment for Canadian exports such as sulphur, cement, magnesium and copper ores. Under the CEPA, Canadian mineral and chemical exports will receive preferential tariff treatment, improving cost competitiveness for Canadian suppliers:
- Chromium compounds – 5% tariffs to be phased out over 5 years.
- Cobalt, unwrought – 5% tariffs to be eliminated upon entry into force
- Cobalt, powders – 5% tariffs to be phased out over 5 years.
- Zinc – 5% tariffs to be phased out over 15 years.
- Titanium ores and concentrates – 5% tariffs to be phased out over 5 years.
- Carbon and carbon blacks – 5% tariffs to be eliminated upon entry into force.
- Silicon – 5% tariffs to be phased out over 5 or 10 years, depending on the specific product.
- Igniters for fireworks – 5% tariffs to be eliminated upon entry into force.
- Polyurethane tar coatings – 10% tariffs to be eliminated over 10 years.
Technical barriers to trade
The CEPA encourages Indonesia to use technical regulations and standards for mineral and chemical products that align with international standards, reducing duplicative testing requirements for Canadian exporters.
Customs procedures and trade facilitation
With the World Trade Organization (WTO) Agreement on Trade Facilitation as a foundation, the CEPA establishes commitments that promote greater predictability, consistency and transparency in customs matters. Through provisions that include, among others, automated border processing, risk-based border inspections, and advance customs rulings for the tariff classification, customs valuation and origin of goods, Canadian exporters to Indonesia in the mineral and chemical industries will benefit from customs processes that ensure their goods spend the least amount of time at the border.
Rules of origin and origin procedures
The CEPA provides clear and simple rules of origin, allowing Canadian exporters to benefit from tariff preferences for qualifying mineral and chemical products. The Agreement includes simplified documentation requirements for proving origin, thereby helping to reduce administrative burdens and making trade processes more efficient.
Trade in services
The CEPA enhances predictability and regulatory transparency for Canadian mineral and chemical products providers. Canadian mineral and chemical related sectors are likely to benefit from the CEPA in related services sectors such as engineering sectors including geotechnical engineering, materials engineering, and process engineering and research and development.
Intellectual property
The CEPA’s Intellectual Property (IP) chapter bolsters and sets out minimum protections for patented chemical compounds and proprietary industrial formulas, including trade secret protection, in support Canadian manufacturers and pharmaceutical producers operating in Indonesia. The chapter promotes cooperation between Canadian and Indonesian authorities to exchange information and share best practices on IP, allowing the federal government to maintain effective lines of communication with the Indonesian government on developments in its IP regime that may affect Canadians operating in this sector.
Investment
The CEPA strengthens protections and enhances predictability for Canadian companies with investments in Indonesia’s mineral and chemical industries. The Agreement also provides protection against expropriation without fair 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 for Canadian business visitors and investors in mineral extraction, chemical engineering, and pharmaceutical development, improving cross-border collaboration and project expansion.
Provincial and territorial interests
Quebec is a mining and chemical powerhouse and a home to major players in pharmaceutical ingredients, industrial chemicals, and critical minerals. CEPA’s tariff elimination on titanium ores, cobalt, and carbon blacks directly supports Quebec’s exports.
Saskatchewan is the world’s largest producer of potash and Indonesia is a key export destination for this vital fertilizer mineral. Under the CEPA, duty-free access for potash is locked in, ensuring long-term stability and competitiveness for Saskatchewan’s potash exporters. This guarantees continued market access and shields the province’s potash industry from future tariff increases, reinforcing Saskatchewan’s role as a reliable supplier of agricultural inputs to Indonesia’s growing economy. Saskatchewan mining industry represents over $12 billion in sales and 12,800 jobs to the Saskatchewan economy.
Ontario leads Canada in chemical manufacturing, pharmaceuticals, and mineral processing, with strengths in zinc, copper, chromium compounds, and industrial coatings. CEPA’s phased tariff elimination on zinc, chromium compounds, and polyurethane coatings supports Ontario’s industrial exports. The province’s robust engineering services and innovation hubs will benefit from CEPA’s services and investment chapters, especially in materials engineering and process optimization.
British Columbia is Canada’s largest copper producer and a key exporter of zinc, molybdenum, and industrial minerals. CEPA’s tariff phase-outs on copper alloys, zinc, and silicon products offer improved market access for BC’s mining and chemical industries.
Manitoba produces nickel, copper, zinc, and cesium, and has a growing chemical sector tied to fertilizers, industrial coatings, and pharmaceuticals. CEPA’s tariff phase-outs on zinc, cobalt, and polyurethane coatings support Manitoba’s export interests. The sector represents $1.7 billion to Manitoba’s GDP and supports approximately 3500 jobs.