Prospect of deal with Indonesia promising for agri-food sector

When Prime Minister Justin Trudeau and his Indonesia counterpart President Prabowo Subianto announced the conclusion of negotiations for a free trade agreement agrifood producers were delighted.

Greg Northey, President of the Canadian Agri-Food Trade Alliance (CAFTA) said they have supported Canada’s efforts to reach agreement on a Comprehensive Economic Partnership Agreement (CEPA) with Indonesia.

“With its population of some 275 million people and growing middle class, we see strong opportunities for growth in agri-food exports to this key market,” Northey said.

Indonesia imported a total of $37.9 billion worth agri-food and seafood products in 2023. Canada was Indonesia’s eighth largest supplier of agri-food and seafood products in 2023, importing $1.6 billion in 2023, accounting for 4.3 per cent of the market.

CAFTA Executive Director Michael Harvey said an agreement would benefit many sectors.

“Though we still need to see the exact details of the agreement to have a full picture, CAFTA has long called for a CEPA,” Harvey said. “Fast-growing markets like Indonesia are key to diversifying our agri-food exports.”

A free trade agreement would be promising for Canada’s soybean industry. Improved access to the market could enable more trade with lower risk for farmers and the soybean value chain, depending on the details of the agreement.

Soy Canada Executive Director Brian Innes said news of potential new trade opportunities are welcome given the protectionist headwinds dominating the news cycle in North America.

“We’ve been sharing with Canadian negotiators for several months how an agreement could help to eliminate tariffs and address non-tariff barriers our sector faces when exporting to Indonesia. We hope our advice will be reflected in the agreement and we look forward to seeing it soon,” Innes said.

As soy exports to Indonesia have grown, the risk of tariff and non-tariff barriers related to plant health and seed regulations have also increased. Working with members, Soy Canada has highlighted to Canadian negotiators how an agreement would be beneficial for the soybean industry.

Indonesia represents the fifth largest soybean export market for Canadian soy, with exports reaching $210 million in 2023, up from an average of $134 million from 2018 – 2022.

Canada’s soybeans are in demand from Indonesian food manufacturers who primarily use them to make soy milk and tempeh.

A Soy Canada delegation will visit Indonesia in February as part of its 2025 Indo-Pacific mission.