Indonesia and Canada have concluded the Indonesia–Canada Comprehensive Economic Partnership Agreement (ICA–CEPA), a landmark free trade deal that is set to expand bilateral trade, strengthen defense cooperation, and deepen business-to-business ties.

The agreement was signed during a bilateral meeting between President Prabowo Subianto and Canadian Prime Minister Mark Carney at West Block, Parliament Hill, Ottawa, on Wednesday, September 24, 2025.

Under the ICA–CEPA, Canada is committed to eliminating 90.5 percent of its import tariffs on Indonesian products, while Indonesia will liberalize 85.8 percent of its tariff lines for Canadian goods. The deal provides stronger legal certainty, wider market access, and enhanced regulatory transparency.

The pact is projected to boost Indonesia’s exports to Canada to US$11.8 billion by 2030, increase national GDP growth by 0.12 percent, and raise investment by 0.38 percent. Beyond trade, it also ensures investment protection, promotes cooperation in SME empowerment, digital marketplaces, intellectual property rights, and sustainable trade.

President Prabowo hailed the agreement as both an economic and political milestone:

“I am very pleased to be here for the signing of CEPA, and I believe this will be a historic moment. This will prove to be a significant milestone,” he said prior to the signing ceremony, as quoted in a press release on Thursday, September 25, 2025.

Defense and security cooperation

Alongside the trade deal, Prabowo and Carney also witnessed the signing of a Memorandum of Understanding (MoU) on Defense Cooperation between Indonesia’s Ministry of Defense and Canada’s Department of National Defence. This agreement builds on a prior memorandum signed in August 2025, expanding joint defense initiatives.

The cooperation framework includes Canada’s participation in the Super Garuda Shield military exercises, the establishment of regular defense dialogues, and long-term collaboration in strengthening the defense industry.

“We want to send more of our young people here to study, train, and collaborate in the field of defense in the future,” Prabowo said.

Business-to-business links

The two leaders also witnessed the signing of an MoU on Cooperation in Commerce, Trade, and Investment between the Indonesian Chamber of Commerce and Industry (KADIN) and the Business Council of Canada (BCC).

Prabowo revealed the intensity of the negotiations leading up to the deal:

“We studied 9,000 pages of the agreement, we stayed up all night. But in the end, we are here to witness and sign this major agreement. I am very proud and very fortunate as President of Indonesia to bring this back to my country.”

Shared vision

Prime Minister Carney emphasized that the agreement goes beyond economics, reflecting shared values and global aspirations:

“Alongside trade, we are also strengthening defense and security cooperation for regional peace and stability. Canada shares the same mission: to build stronger economies both at home and globally. As you said yesterday, peace, prosperity, and progress are not the privilege of a few, but the right of all.”