Canada and Indonesia Comprehensive Economic Partnership Agreement (CEPA)
Canada and Indonesia announced a new Comprehensive Economic Partnership Agreement (CEPA) on September 24th.
The agreement has been touted by the Canadian government as a significant development. As the press release from the Prime Minister’s Office notes, “We are building our strength at home, diversifying our partnerships abroad, and building a web of new connections to pursue our interests.”
It is anticipated that the agreement will take effect in 2026. In the interim, it requires parliamentary review and approval.
The agreement has positives and (somewhat puzzling) negatives:
On the positive side, the apparel rule of origin is a cut-and-sew rule and will support growth in trade between the two countries.
Having said that, the Canadian government has also established an exceedingly long tariff phase-out schedule that will delay tariff elimination on most apparel products for at least five, and up to fifteen years for many products. Many recent free trade agreements have implemeted tariff elimination much more quickly.
We are trying to get a better understanding of the government’s intention regarding the tariff elimination schedule.
Any CAF member who would like more details on the agreement, including the rule of origin, and the tariff elimination schedule, should contact Bob Kirke at the CAF - bkirke@apparel.ca.