Canada and Indonesia Finalize New Trade and Defence Agreements

Canada has signed what officials are calling a “game-changing” trade agreement with Indonesia, marking the country’s first bilateral deal with a member of the Association of Southeast Asian Nations. The agreement, announced this week, will see more than 95 per cent of tariffs on Canadian exports to Indonesia reduced or eliminated once it is fully in place. Canadian businesses will gain easier access to one of the world’s largest and fastest-growing markets, giving them a stronger footing in agriculture, minerals, clean energy and technology.

Negotiations for the pact began in 2021, and Canadian officials describe it as a comprehensive deal that goes beyond goods and services. Alongside the trade pact, both countries signed a new defence cooperation agreement that will focus on maritime security, cyber defence, peacekeeping and military education.

For Canada, the deal is a significant step in its Indo-Pacific strategy, as it aims to strengthen ties in the region and reduce its reliance on traditional markets. For Indonesia, it opens the door to Canadian expertise and investment, especially in critical minerals and nuclear energy technology.

Indonesia is the world’s fourth most populous country, boasting a young population and a rapidly growing economy. That makes it an attractive partner for Canada at a time when global trade patterns are shifting. Officials also say the partnership has the potential to reshape how the two countries collaborate on trade and security, while also supporting long-term growth on both sides.