Indonesia-Canada Trade Pact to Take Effect December 1
The Comprehensive Economic Partnership Agreement will liberalise tariffs on most Indonesian goods when it enters into force.
Updated on Nov. 7, 2026 in International Trade
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The Indonesia-Canada Comprehensive Economic Partnership Agreement will enter into force on December 1, 2026, following the exchange of formal notifications confirming ratification by both countries. Canada will liberalise 90.55 per cent of its tariff lines for Indonesian products.
Why it matters
The agreement is projected to sharply reduce duties on Indonesian apparel, which currently average 17.2 per cent on a trade-weighted basis. Bilateral trade reached $4.36 billion in 2025, and the pact aims to expand it further.
Canada will liberalise 90.55 per cent of its tariff lines for Indonesian products, and bilateral trade rose from about $3.57 billion in 2024 to $4.36 billion in 2025. Projected first-year Canadian imports from Indonesia rise about 38.9 per cent, though these remain forecasts.
The players
Indonesia
Southeast Asia's largest economy and a major exporter of textiles, apparel and leather goods.
Canada
A G7 economy that is liberalising its tariff schedule for Indonesian products under the pact.
The details
The agreement takes effect once both countries complete the exchange of formal notifications. Indonesia's exports to Canada totalled around $1.69 billion, while imports from Canada amounted to approximately $2.67 billion.
Timeline
2025: Bilateral trade between Indonesia and Canada reached $4.36 billion.
December 1, 2026: The agreement enters into force.
Market Dynamics
The pact extends Canada's pattern of bilateral tariff liberalisation seen in earlier agreements to a Southeast Asian partner. It positions Indonesian apparel against sourcing rivals such as China and Vietnam, which already compete for Canadian buyers.
Canadian apparel importers may face lower duties on Indonesian goods once the agreement takes effect on December 1, 2026. Buyers and investors tracking textile sourcing costs should watch whether projected import growth materialises in the first year.
The takeaway
Tariff cuts can shift sourcing decisions quickly, especially in price-sensitive categories like apparel. Watch the first-year trade data to see whether projected gains hold.
Further reading
For more on how tariff changes reshape cross-border commerce, explore International Trade coverage.
Source note: This article includes information reported by Fibre2fashion.
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