Indonesia and Canada agreed to a deal to lower trade barriers and ease investment procedures, part of efforts by both nations to expand global economic ties in the wake of higher US tariffs.
Indonesian President Prabowo Subianto and Canadian Prime Minister Mark Carney signed the pact, known as a comprehensive economic partnership agreement, at a meeting in Ottawa on Wednesday.
Officials in Indonesia previously said the deal would help more than 90 percent of the country’s goods get better access to the Canadian market, including textiles, paper, processed foods and palm oil.
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Canada has praised the pact for enhancing access to Southeast Asian supply chains and boosting transparency for trade and investment.
Indonesia is Canada’s largest export market in Southeast Asia and its second largest destination for known direct investment in the region, Canada’s Global Affairs department said last year.
Total trade between the countries stood at about $4 billion last year.
Canadian Trade Minister Maninder Sidhu said the agriculture sector in particular is excited about access to the “huge market” of Indonesia, which has a population of about 280 million.
“Potash, wheat, soy is already going there, but they want to do more with Canada,” Sidhu said in an interview. “There are opportunities all the way through, even to the agri-food side of processed goods.”
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He said there’s also strong potential for nuclear energy investment, such as tapping into Canada’s expertise in small modular reactors.
The pact also sets common rules on digital trade and intellectual property and stems from a process launched in late 2021. The deal will require ratification in Indonesia and Canada before it comes into force.
Canada is also in talks for a separate trade agreement with a wider bloc of Southeast Asian nations, part of ongoing efforts to diversify ties and reduce reliance on the US market, the destination for about three-quarters of its exports last year. Indonesia this week concluded a trade deal with the European Union that was a nearly a decade in the making.
