Indonesia and Peru seal a trading agreement during their leaders' meeting
The Comprehensive Economic Partnership Agreement (CEPA) between Indonesia and Peru, signed in August 2025 after 14 months of negotiations, aims to reduce tariffs, expand market access, and increase bilateral trade in goods and services. The agreement strengthens cooperation in multiple sectors including mining, energy transition, fisheries, defense, and food security.
Key specific provisions and highlights of the CEPA include tariff reduction, market access for Peruvian products, sectoral cooperation, and a trade balance that previously favoured Indonesia. The agreement lowers tariffs to facilitate smoother trade flows between the two countries, benefiting exporters and consumers alike. Peru secured access for blueberries into the Indonesian market, complementing its existing quinoa and grape exports.
Apart from trade in goods and services, the deal promotes collaboration in strategic sectors such as mining, energy transition, fisheries, defense, and anti-narcotics efforts. Indonesia views the deal as a gateway to Central and South American markets, while Peru gains broader access to the dynamic Asian economy.
The CEPA was signed during the first-ever state visit by a Peruvian president to Indonesia, commemorating 50 years of diplomatic relations between the two nations. The Peruvian President, Dina Boluarte, was greeted by a marching band and national anthems at the ceremony. Indonesian President Prabowo Subianto met with Peruvian President Dina Boluarte for the signing.
The agreement is expected to boost trade volumes and diversify traded goods and services between Indonesia and Peru. It offers Peruvian exporters new opportunities in Indonesia’s large market, especially in agriculture and manufacturing sectors. Indonesian businesses may leverage this agreement to enter broader Latin American markets through Peru, increasing Indonesia’s trade influence in the region.
The Indonesia-Peru CEPA is a comprehensive framework designed to enhance economic ties, reduce trade barriers, and foster cooperation across multiple strategic industries, marking a significant step in bilateral and regional economic integration. However, it comes after US President Donald Trump imposed a tariff rate of 19 percent on imports from Indonesia.
It is important to note that President Boluarte is currently facing protests due to an explosion of gang violence, with his approval rating around 2 percent in May. His trip to Indonesia was a reciprocal visit after Prabowo's visit to Peru in November for the APEC Summit. The value of Indonesian exports to Peru in 2024 was $329.4 million, while the value of Peru's exports to Indonesia was $149.6 million. The agreement was finalized within 14 months and was signed in Jakarta, Indonesia.
References: [1] The Jakarta Post. (2025). Indonesia and Peru sign comprehensive economic partnership agreement. Retrieved from https://www.thejakartapost.com/news/2025/08/12/indonesia-and-peru-sign-comprehensive-economic-partnership-agreement.html [2] The Straits Times. (2025). Indonesia and Peru sign landmark trade deal to boost bilateral ties. Retrieved from https://www.straitstimes.com/world/indonesia-and-peru-sign-landmark-trade-deal-to-boost-bilateral-ties [3] Reuters. (2025). Peru's Boluarte visits Indonesia, signs trade deal with Prabowo. Retrieved from https://www.reuters.com/world/indonesia-perus-boluarte-visits-indonesia-signs-trade-deal-with-prabowo-2025-08-11/ [4] World Trade Organization. (2025). Peru-Indonesia Comprehensive Economic Partnership Agreement. Retrieved from https://www.wto.org/english/tratop_e/tpr_e/s338_e.htm [5] Asia Times. (2025). Indonesia-Peru deal: A gateway to Latin America. Retrieved from https://asiatimes.com/2025/08/indonesia-peru-deal-a-gateway-to-latin-america/
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