Ottawa (Rajeev Sharma): In a move set to reshape Canada’s trade footprint in Southeast Asia, Prime Minister Mark Carney today announced a comprehensive economic agreement with Indonesia, marking Canada’s first-ever bilateral trade pact with a member of the Association of Southeast Asian Nations (ASEAN).
Welcoming Indonesian President Prabowo Subianto to Ottawa, Prime Minister Carney unveiled the Canada-Indonesia Comprehensive Economic Partnership Agreement (CEPA), a major step in Canada’s efforts to diversify trade relationships amid shifting global dynamics.
“This agreement represents not only a new era of economic cooperation but also a critical component of our broader Indo-Pacific strategy,” Carney said during the joint press conference. “We are deepening partnerships that serve our economic interests and promote regional stability.”
New Opportunities for Canadian Exports
Once in force in 2026, the CEPA will eliminate or significantly reduce trade barriers for over 95% of current Canadian exports to Indonesia. Key sectors expected to benefit include clean tech, agriculture, infrastructure, financial services, and critical minerals.
Major Canadian exports like wheat, soybeans, wood products, and potash will become more competitive in the Indonesian market, giving Canadian producers access to one of the world’s most rapidly growing economies. Indonesia is projected to rank among the top five global economies by 2050.
The agreement also aims to provide greater regulatory transparency and predictability, strengthening investor confidence and enhancing the ease of doing business between the two nations.
$825 Million Investment Boost Through EDC-INA Partnership
As part of the broader announcement, Export Development Canada (EDC) signed a Market Leader Partnership Agreement with the Indonesia Investment Authority (INA). The deal includes a commitment of up to $825 million in debt financing, with both agencies working collaboratively to attract investment in key sectors such as renewable energy, digital infrastructure, and advanced manufacturing.
Business-to-Business Cooperation and Bilateral Missions
Private sector engagement is also on the rise, with a new cooperation agreement signed between the Business Council of Canada and Kadin, Indonesia’s Chamber of Commerce and Industry. The pact is designed to facilitate bilateral trade missions and expand cross-border commercial ties through a formal business network.
Deepening Defence Cooperation in the Indo-Pacific
Recognizing the growing importance of security in global economic partnerships, Canada and Indonesia also signed a new Defence Cooperation Agreement. The deal expands upon last month’s Military Cooperation Memorandum of Understanding, and will enhance cooperation in cybersecurity, peacekeeping, maritime patrols, and joint military training.
“This is a critical piece of our Indo-Pacific Strategy,” Carney noted, “ensuring that our economic expansion into the region is underpinned by a strong commitment to peace and stability.”
A Strategic Pivot Toward Southeast Asia
The Canada-Indonesia CEPA reflects Ottawa’s broader aim to build resilient, diversified trade corridors beyond its traditional partners. With tensions and protectionist trends rising in many parts of the world, the agreement signals Canada’s intent to forge new alliances based on mutual economic benefit and regional cooperation.
“This is more than a trade deal—it’s a long-term partnership,” said Carney. “Together, Canada and Indonesia are laying the groundwork for shared prosperity in an uncertain world.”
