Bisnis: Indonesia Seals Free Trade Deal with Eurasian Economic Union

Significance of the Free Trade Agreement

The recent signing of a free trade agreement between Indonesia and the Eurasian Economic Union (EAEU) marks a critical step in Indonesia's strategy to diversify its export markets. This agreement, finalized in St. Petersburg, Russia, is expected to unlock new opportunities for Indonesian commodities in a region that encompasses a population of approximately 180 million and a combined GDP of $2.56 trillion.

By establishing tariff preferences, the agreement aims to enhance the competitiveness of Indonesian products such as palm oil, footwear, textiles, and various manufacturing goods. This move is particularly strategic as it positions Indonesia to tap into the growing markets of the EAEU, which includes countries like Russia, Kazakhstan, Belarus, Armenia, and Kyrgyzstan.

Economic Implications and Trade Potential

In 2025, trade between Indonesia and the EAEU reached an impressive $4.52 billion, underscoring the importance of this partnership. The free trade agreement is anticipated to further elevate these figures by facilitating easier access for Indonesian goods into the Eurasian market, which has been historically underutilized by Indonesian exporters.

Economic analysts suggest that this agreement could lead to a significant increase in exports, particularly for sectors where Indonesia holds a competitive advantage. For instance, palm oil, which is one of Indonesia's key export products, stands to benefit substantially from reduced tariffs, making it more appealing to consumers in the EAEU.

Broader Context of Indonesia's Trade Strategy

Indonesia's decision to engage with the EAEU is part of a broader strategy to diversify its trade relationships beyond traditional partners. Historically reliant on markets in Asia and the West, Indonesia is actively seeking to establish itself as a key player in global trade by exploring new partnerships across different regions.

This approach aligns with Indonesia's vision to become a major economic force in Southeast Asia and beyond. By strengthening ties with the EAEU, Indonesia not only seeks to enhance its economic resilience but also to position itself as a bridge between Asia and Europe, leveraging its strategic geographical location.

Sources: 2 Tahun Berlalu, Perjanjian Dagang RI EAEU Akhirnya Resmi Diteken; https://www.youtube.com/watch?v=6dH76D5jAZc