Trade Deal with Indonesia an Opportunity for Canadian Agriculture

The culmination of trade talks with Indonesia should eventually translate into plenty of opportunity for Canadian agriculture, trade and commodity groups say. 

Prime Minister Justin Trudeau and his Indonesian counterpart, President Prabowo Subianto, last week announced the substantive conclusion of trade talks that are expected to lead to a formal deal between the two countries in 2025.   

The world’s fourth largest country by population and with a GDP of close to $1.9 trillion, Indonesia is Canada’s largest export market in Southeast Asia, and a key destination for Canadian agricultural products, as well as manufactured goods, and natural resources. The deal is expected to eliminate or reduce tariff and non-tariff barriers, enhance Canadian access to Southeast Asian supply chains, and establish a more transparent and predictable environment for trade and investment. 

According to the Canadian Agri-Food Trade Alliance (CAFTA), Indonesia imported a total of C$37.9 billion worth agri-food and seafood products in 2023. Canada was Indonesia's eighth largest supplier at $1.6 billion, accounting for 4.3% of the market. 

“CAFTA has long supported Canada’s efforts to reach agreement on a (trade deal) with Indonesia, with its population of some 275 million people and growing middle class,” said Greg Northey, CAFTA president. “We see strong opportunities for growth in agri-food exports to this key market.” 

Although the exact details of the agreement are still to come, fast-growing markets like Indonesia are key to diversifying Canadian agri-food exports, added CAFA Executive Director Michael Harvey. 

Brian Innes, executive director of Soy Canada, said his organization is hopeful a trade deal will help to eliminate tariffs and address non-tariff barriers the soybean sector faces when exporting to Indonesia. Canadian soybeans are potentially now subject to a 27% tariff into Indonesia. Although recent trade has flowed without any tariffs being applied, Soy Canada said a new trade agreement should provide further certainty for exporters. 

“News of potential new trade opportunities is fantastic, especially given the protectionist headwinds dominating the news cycle in North America,” Innes said in a release.