On 23 September 2025, Indonesia and the European Union officially signed the Comprehensive Economic Partnership Agreement (IEU-CEPA). Narratives regarding potential GDP increases and rising exports following the implementation of IEU-CEPA have been circulated widely in the media. The projected rise in exports is largely attributed to several key commodities expected to dominate the European market, including palm oil, plantation products, and timber-based goods.
There is an assumption and analysis that suggests1 how the trade structures of Indonesia and the European Union are complementary. Indonesia’s Trade Complementarity Index (TCI) for exports to the EU imports is approximately 0.6 out of a maximum of 1, which indicates that many of Indonesia’s major export products match the EU’s import needs (74% of Indonesia’s 500 main export products are also key EU imports). This also suggests that their Export Similarity Index is low (around 0.3/1), showcasing how Indonesia tends to export primary-sector commodities (which include natural resources and raw materials) to the EU, while the EU exports secondary-sector products (high-technology manufactured goods) to Indonesia. The European Union excels in services and capital goods, whereas