Prospect of deal with Indonesia promising for Canadian soy

Ottawa, ON – Friday’s announcement by Prime Minster Justin Trudeau and his Indonesia counterpart President Prabowo Subianto on the substantive conclusion of negotiations for a free trade agreement is very promising for Canada’s soybean industry. Improved access to this significant and growing market could enable more trade with lower risk for farmers and the soybean value chain depending on the details of the agreement.

“News of potential new trade opportunities is fantastic, especially given the protectionist headwinds dominating the news cycle in North America,” says Brian Innes, executive director of Soy Canada. “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.”

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 if it:

• Eliminates tariffs on soybeans and soy products: Under current conditions, Indonesia could apply a 27 per cent tariff to Canadian soybeans. Recently, trade has flowed without any tariffs applied, and the industry’s expectation is that tariff free trade should be confirmed to provide ongoing stability.
• Implements measures to reduce the risk of non-tariff barriers such as:
  • Improving upon current WTO commitments to science-based plant health regulations, so that issues related to the regulation of weed seeds and insects is predictable and based on science.
  • Establishing commitments and a cooperation mechanism on seed technology such as biotechnology and gene editing so that customers can purchase the soybeans they want with the confidence that any trade related issues can be managed through dialogue to improve predictability.
  • Recognize that other sanitary and phytosanitary measures such as those related to crop protection products should be managed through a predictable and science-based approach.

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.

Soy Canada is a national value-chain organization for the soybean sector, including seed companies, growers, exporters, and processors. Created in 2014, we provide industry leadership on issues affecting the growth and profitability of the soybean sector, coordinate research efforts across the value chain and across the country, as well as lead on market access and market development efforts. Canada is a global leader in producing high quality, sustainable and trusted soybeans for world markets. Soybeans are among the top three most valuable crops in Canada, with 70% of production exported each year.