The Canada-Indonesia Comprehensive Economic Partnership Agreement (CEPA) will create new opportunities for Canadian exporters. Under the CEPA, the majority of Indonesia’s tariff lines that are currently subject to tariffs will be subject to tariff liberalization. Once the CEPA is fully implemented, more than 95% of current Canadian exports to Indonesia will receive preferential tariff treatment, making Canadian goods more competitive in the Indonesian market.
While Canada secured an ambitious goods market access outcome, the tariff elimination outcome in the CEPA should be considered as the foundation for future improvements, as Indonesia will continue to maintain tariffs on some goods of export interest to Canada within its schedule. For example, Canadian products excluded from Indonesia’s tariff elimination include crab, cosmetic products such as soap, industrial machinery products such as heat exchange units, and instruments such as optical telescopes. Under the CEPA, Canada and Indonesia agreed to negotiate additional tariff commitments in the future to cover goods that are currently excluded. The CEPA includes an obligation to start discussions on additional tariff commitments 3 years following its entry into force.
To benefit from tariff preferences in Indonesia, Canadian exporters must ensure their goods meet the applicable rules of origin. The importer must have a valid declaration of origin in their possession at the time of importation.
Note: Tariff information is provided for indicative purposes only. The tariff treatment of a good exported to Indonesia depends on its specific tariff classification as determined by Indonesia’s Directorate General of Customs and Excise.
Agriculture
- Prior to the entry into force of the CEPA, Canadian agriculture and agri-food exports to Indonesia faced an average tariff of 8.6%.
- Canadian dutiable exports of agricultural goods faced tariffs ranging between 5% and 30%, which will be eliminated upon entry into force or phased out over 5 to 15 years. Including:
- 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.
- Canola
- Indonesia to eliminate tariffs of 5% on canola seed and canola meal within 10 years.
- Indonesia to eliminate tariffs of 5% on crude and refined canola oil upon entry into force.
- Soybeans
- Indonesia to lock in MFN duty-free treatment for soybeans.
- Indonesia to eliminate tariff of 5% on crude and refined soybean oil, soybean meal upon entry into force.
- Wheat
- Indonesia to lock in MFN duty-free treatment for wheat for human consumption.
- Indonesia to eliminate tariff of 5% on feed wheat upon entry into force.
- Pulses
- Indonesia to eliminate tariff of 5% on dry peas, lentils, chickpeas and adzuki beans upon entry into force.
- Potatoes
- Indonesia to eliminate tariff of 20% on chipping potatoes within 15 years.
- Indonesia to eliminate tariff of 5% on frozen french fries upon entry into force.
- Pet food
- Indonesia to eliminate tariff of 5% on dog and cat food upon entry into force.
- Prepared and packaged foods
- Indonesia to eliminate tariffs of up to 20% on most sugar confectionery products and on all baked goods upon entry into force.
- 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.
- Beef
Aerospace
- The CEPA will lock in duty-free treatment for almost all aerospace products. For turbo propellers, the current tariffs of 5% will be eliminated over 10 years.
Automotive parts
- Canadian dutiable exports of auto parts are subject to tariffs ranging between 5% and 15%, with an average of 8.2%
- Once the CEPA is fully implemented, the large majority of auto parts will be duty-free, with a few remaining tariff lines (mostly auto bodies, including cabs).
Fish and seafood
- Canadian dutiable exports of fish and seafood products are subject to tariffs ranging between 5% and 15%, with an average of 6.1%.
- With the exception of certain key Canadian interests that are sensitive for Indonesia (mainly crab), the CEPA will open opportunities for increased exports by eliminating tariffs on the vast majority of fish and seafood products.
Forest products
- Canadian dutiable exports of forest products are subject to tariffs ranging from 5% to 25% that will be eliminated upon entry into force or phased out over 5 to 15 years.
- Prior to the entry into force of the CEPA, Indonesia’s average tariff on Canadian forest products such as wood, pulp and paper was 3.9%.
- Canadian exports of wood pulp will lock in duty-free access to Indonesia.
Chemicals
- Prior to the entry into force of the CEPA, Indonesia’s average tariff on chemical products was 4.8%, reaching up to 20%.
- Most of these tariffs will be eliminated upon entry into force or phased out over 5 to 15 years.
Cosmetics
- Prior to the entry into force of the CEPA, all Canadian exports of cosmetics to Indonesia faced duties, with Indonesia maintaining tariffs ranging from 5%-15% on cosmetic products, averaging 12.2%.
- Almost all cosmetic lines will be duty free within 10 to 15 years of entry into force.
Fertiliser
- The CEPA will lock in duty-free treatment for Canada’s largest exports of fertilisers (i.e. potash) and will phase out tariffs of 5% or 10% over 5 to 15 years on other fertiliser products.
Information and communication technologies
- Before the CEPA, Canadian dutiable exports of information and communication technology products were subject to Indonesian tariffs ranging from 5% to 12.5%, with an average of 2.5%.
- Under the CEPA, Indonesia will eliminate the majority of its tariffs on information and communication technology products upon entry into force or phased out over 5 to 15 years.
Machinery and equipment
- The majority of Canadian exports in this sector are subject to tariffs that can reach as high as 20% and 30% and average 5.3%.
- Under the CEPA, Indonesia will eliminate the vast majority of tariffs on machinery and equipment upon entry into force or phased-out over 5 to 15 years.
Medical devices
- Canadian dutiable exports of medical devices are subject to tariffs ranging from 5% to 15%, with an average of 5.9%.
- Under the CEPA, Indonesia will eliminate the majority of tariffs on almost all of Canada’s existing exports of medical devices upon entry into force or phased- out over 5 to 15 years.
Pharmaceuticals
- Canadian pharmaceutical exports to Indonesia are subject to tariffs of 5%, averaging 3.4%.
- The CEPA will lock in existing duty-free treatment and eliminate tariffs on Canadian exports upon entry into force or phased out over 5 or 10 years.
Plastics
- Canadian exports of plastics are subject to tariffs as high as 25%, with tariffs averaging 9.7%.
- The majority of tariffs on Canadian exports of plastics will be eliminated upon entry into force or phased out over 5 to 15 years.
Scientific instruments
- Almost all Canadian exports of instruments are subject to tariffs that range from 5% to 15%, with an average of 4.9%.
- CEPA will eliminate tariffs on the majority of existing Canadian exports in this sector upon entry into force or phased out over 5 to 15 years.
Textile and apparel
- Indonesia applies tariffs to all imports of apparel that are as high as 25% and average 23.6%.
- The CEPA will eliminate tariffs on the majority of existing Canadian apparel exports phased out over 10 to 15 years.
- Almost all Canadian exports of textiles are subject to tariffs that average 12.0% but can be as high as 35%.
- Under the CEPA, the vast majority of Canada’s existing textile exports will receive either duty-free treatment upon entry into force or tariffs phased out over 5 to 15 years.