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Canada–Indonesia Trade Deal Lowers Tariffs

An Act to implement the Comprehensive Economic Partnership Agreement between Canada and Indonesia

Summary

  • Implements the Canada–Indonesia Comprehensive Economic Partnership Agreement (CICEPA), approves the treaty, and aligns federal laws to create a Canada–Indonesia free trade area.
  • Establishes an Indonesia Tariff (IDT) with staged elimination of customs duties (many to zero immediately; others over 5, 10, or 15 years via Y1–Y3 schedules), updates origin certification rules, and adjusts customs procedures.
  • Empowers ministers to represent Canada on joint bodies, administer dispute processes, and authorize orders to suspend benefits if Indonesia breaches obligations.
  • Creates Indonesia-specific bilateral safeguard tools through the Canadian International Trade Tribunal to address import surges that are a principal cause of serious injury, enabling temporary duties and suspension of tariff reductions.
  • Bars private causes of action to enforce the agreement without Attorney General consent, amends related Acts (Customs, CITT, Investment Canada, Commercial Arbitration), and comes into force by order in council.

Builder Assessment

Vote Yes

Overall, this implementing bill advances a major free trade agreement that reduces tariffs, opens a large market, and provides tools to manage injury risks, supporting prosperity and competitiveness. There are execution risks—especially enforcement capacity and sectoral adjustments—but the balance of benefits aligns with a growth agenda.

  • Strong positives: broad tariff elimination (IDT), clearer investment and services rules, supply-chain cost reductions, and SME provisions that can expand export participation.
  • Productive safeguards: CITT-based, Indonesia-specific measures and temporary duties provide a safety valve against injurious import surges.
  • Execution risks to mitigate: ensure CBSA has modern, risk-based enforcement to curb origin fraud and forced labour; publish sector-by-sector market access and adjustment plans; and clarify any ISDS exposure and reservations to protect the right to regulate.
  • Implementation suggestions: fast-track SME onboarding via simple digital origin tools and template certifications; commit to timely use of safeguards where warranted; and maintain clear carve-outs for culture, Indigenous participation, and public-interest regulation, without adding red tape.

Question Period Cards

What concrete GDP, export, and job gains does the government project from CICEPA, and how will it ensure SMEs can actually use the new preferences instead of getting bogged down by rules-of-origin compliance?

If the Canadian International Trade Tribunal finds Indonesian imports are a principal cause of injury, will the government commit to deploy the Indonesia-specific safeguard within 90 days, and what transition support is planned for at-risk sectors like agri-food, apparel, and shipbuilding?

Given the shift to importer-based certificates of origin, what resources and digital tools will CBSA deploy to prevent origin fraud, block goods made with forced labour, and protect Canadians while keeping border processes efficient?

Principles Analysis

Canada should aim to be the world's most prosperous country.

Expands access to Indonesia’s large and growing market, reducing tariffs and improving certainty for goods, services, and investment, which can raise GDP, trade volumes, and incomes.

Promote economic freedom, ambition, and breaking from bureaucratic inertia (reduce red tape).

Removes tariff barriers and allows importer-based origin certification, facilitating commerce; while it creates committees and procedures, the net effect lowers barriers to trade.

Drive national productivity and global competitiveness.

Lower input costs and wider market access can boost scale and competitiveness; safeguard provisions temper risks of injurious import surges.

Grow exports of Canadian products and resources.

Directly targets tariff elimination and market opening for Canadian exports across agriculture, resources, manufacturing, and services.

Encourage investment, innovation, and resource development.

Establishes predictable rules for investors and trade in services, likely encouraging cross‑border investment, though potential ISDS exposure warrants vigilance.

Deliver better public services at lower cost (government efficiency).

Introduces some administrative costs (committees, panels, safeguards) but also simplifies some customs processes; overall efficiency impact is unclear.

Reform taxes to incentivize work, risk-taking, and innovation.

Cuts tariffs (a tax on trade), reducing costs and encouraging entrepreneurship and investment, though it does not reform income or corporate taxation.

Focus on large-scale prosperity, not incrementalism.

A comprehensive, national trade pact with a G20 economy and 270+ million consumers represents a large-scale strategy rather than incremental change.

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PartyMinister of International Trade
StatusAt second reading in the House of Commons
Last updatedN/A
TopicsTrade and Commerce, Foreign Affairs, Economics, Labor and Employment, Climate and Environment, Indigenous Affairs
Parliament45