Canadian Prime Minister Mark Carney has announced a new trade agreement with Indonesia. The agreement marks Indonesia as the first ASEAN country to have a bilateral trade agreement with Canada. 

“Canada and Indonesia are together opening up significant new economic opportunities. Our new trade agreement is a game changer for our workers and businesses, opening new markets and driving more investment among developing countries,” Carney said in a written statement published on the official Prime Minister of Canada website on Wednesday, September 24. 

Carney added that Canada’s new government is diversifying and strengthening partnerships with other countries to create prosperity, security, and high-quality career opportunities for Canadian workers. 

Benefits for Indonesia and Canada 

During President Prabowo Subianto’s visit to Ottawa, Indonesia and Canada signed the ICA-CEPA trade agreement. Through this deal, Indonesia secured tariff-free access for its exports to Canada while creating a more transparent and predictable environment for trade and investment. 

The agreement also opens new opportunities for Canadian workers and industries in clean technology, agri-food, infrastructure, critical minerals, and financial services. Once fully implemented in 2026, more than 95% of Canadian exports to Indonesia will face reduced or eliminated tariffs. This will make Canadian exports such as wheat, potash, lumber, and soybeans more competitive in the Indonesian market. 

Investment Financing Agreement 

To boost investment between the two countries, Carney and Prabowo welcomed an agreement between Export Development Canada (EDC) and Indonesia Investment Authority (INA). Under this partnership, EDC will provide debt financing of up to USD 825 million, equivalent to IDR 13.76 trillion. Both institutions will collaborate to attract investment and create new business opportunities for Canadian exporters and investors, particularly in infrastructure, digital services, renewable energy, and advanced manufacturing. 

Strengthening Cooperation with Kadin 

Trade cooperation was also reinforced through the Indonesian Chamber of Commerce and Industry (Kadin). The Canada Business Council signed an agreement with Kadin to strengthen trade and investment ties and to build a strong business alliance network through bilateral trade missions. 

This agreement is expected to expand business networks through bilateral missions. With Indonesia projected to become one of the world’s five largest economies by 2050, the partnership offers major potential for Canadian workers, businesses, and investors. 

“This agreement will open new opportunities for Canadian businesses in one of Southeast Asia’s leading economies,” said Canada’s Minister of International Trade, Maninder Sidhu. 

Cooperation in Defense 

Beyond economic matters, Canada and Indonesia also signed a new Defense Cooperation Agreement, following last month’s Memorandum of Understanding on military cooperation. The agreement will deepen collaboration in military training and education, maritime security, cyber defense, and peacekeeping. 

“Strengthening our defense ties with key partners such as Indonesia demonstrates Canada’s commitment to supporting regional peace, security, and stability, and this will continue for the long term,” said Canadian Minister of National Defense David J. McGuinty. 

This article is published in partnership with Katadata 

Original article here