Canada–Indonesia Trade Deal Lowers Tariffs

Summary#

• This bill puts into Canadian law a new trade deal with Indonesia. It lowers or removes customs duties (import taxes) on many goods, sets up rules to manage trade disputes, and updates several federal laws.

• It creates a new “Indonesia Tariff,” moves many duties to zero now or over time, and allows emergency measures if imports surge and harm Canadian producers.

• Approves the Canada–Indonesia Comprehensive Economic Partnership Agreement (CICEPA) and makes Canadian laws match it.

• Creates an “Indonesia Tariff” that makes most Indonesian goods duty‑free now or in phases (some immediately, some over about 5, 10, or 15 years).

• Excludes some sensitive products from lower tariffs (for example, many dairy, egg, some poultry, sugar, and certain alcohol items).

• Lets Canada pause or add temporary duties if a jump in Indonesian imports is a main cause of serious harm to Canadian producers.

• Sets up committees on trade, labour, environment, and sustainable development, and allows panels to settle disputes.

• Says people and companies cannot sue in Canadian courts to enforce the deal; disputes go through government‑to‑government panels or arbitration (a legal process to settle disputes).

• States the deal does not apply to natural water and keeps space for cultural policy. It also recognizes the role of Indigenous Peoples and small businesses in trade.

What it means for you#

• Consumers

  • Many Indonesian goods should get cheaper over time as tariffs fall, especially clothing, shoes, household goods, and some processed foods.
  • Some prices may drop right away; others will phase down over several years. For example, many clothing tariffs of up to about 18% fall to zero over as long as 14 years.
  • Some items are excluded, so prices for many dairy and egg products, some poultry, sugar, and certain alcohol are unlikely to change because of this deal.

• Importers and retailers

  • A new “Indonesia Tariff” makes most Indonesian goods duty‑free now or after a scheduled phase‑out (marked as A, Y1, Y2, Y3 in the tariff list).
  • To claim the lower duty, you must keep proof the goods “originate” in Indonesia (rules of origin) and keep records if asked by customs.
  • Plan sourcing and pricing around the tariff schedule: some lines go to zero now, others step down over about 4, 9, or 14 years.

• Canadian exporters and investors

  • The deal aims to lower barriers in Indonesia and give clearer, more predictable rules for goods, services, and investment.
  • Small and medium‑sized businesses are a focus; there will be official contact points and committees to help address problems.

• Farmers, fishers, and food processors

  • Many supply‑managed products remain protected from tariff cuts. Other items (like some seafoods and processed foods) see lower Canadian tariffs on imports, which could mean more competition at home.
  • If imports surge and seriously harm domestic producers, Canada can use temporary “safeguard” measures.

• Workers

  • Jobs in export‑oriented sectors could benefit from new market access.
  • Sectors facing more import competition (for example, textiles, clothing, footwear, and some processed foods) may feel pressure as tariffs drop.

• Environment, labour, and communities

  • The agreement includes chapters on labour rights and environmental protection, with councils and committees to oversee cooperation and enforcement.
  • The deal recognizes Indigenous participation in trade.
  • Natural water is excluded; cultural industries keep policy protections.

• Timing

  • The law takes effect on a date set by the federal cabinet. Changes to duties will follow the schedules in the bill once in force.

Expenses#

No publicly available information.

Proponents' View#

• Opens a large and growing market for Canadian goods and services, with clearer rules for business and investment.
• Lowers costs and expands choice for Canadian consumers, especially on clothing, footwear, and many household items.
• Provides stable, rules‑based dispute systems and anti‑corruption commitments, which reduces risk for businesses.
• Includes labour and environment chapters that can help improve standards and enforcement over time.
• Focuses on small businesses and Indigenous participation, aiming to share the benefits more widely.
• Includes safeguard tools so Canada can act if imports cause serious harm to domestic producers.

Opponents' View#

• Lower tariffs on clothing, footwear, and some foods could undercut Canadian manufacturers and processors, risking jobs.
• Labour and environmental commitments may be hard to enforce in practice, leading to limited real‑world change.
• Investor‑state arbitration provisions could let foreign investors challenge public‑interest rules, narrowing policy space.
• Reduced tariffs mean less customs revenue for the federal government.
• Safeguards exist but can be slow and complex to use, leaving domestic producers exposed to sudden import surges.