Canada and Indonesia have signed a landmark free trade agreement (FTA) that will remove or reduce tariffs on more than 95 percent of Canadian exports to its largest market in Southeast Asia.

The Comprehensive Economic Partnership Agreement (CEPA), signed in Ottawa on Wednesday, marks Canada’s first bilateral trade deal with a member of the Association of Southeast Asian Nations (ASEAN).

Prime Minister Mark Carney hailed the deal as “the right deal at the right time with the right partner,” underscoring Indonesia’s role as a key export destination for Canadian commodities such as wheat, potash, timber, and soybeans. Indonesian President Prabowo Subianto, calling the signing a “historic moment,” said he was “very lucky to be the Indonesian president who brings this back to Indonesia.”

Under the agreement, Canada will eliminate tariffs on more than 90 percent of Indonesian imports, a move expected to bolster exports of garments and leather goods to the North American market.

The trade pact also advances Canada’s broader Indo-Pacific strategy, first introduced under former Prime Minister Justin Trudeau, by deepening economic engagement in the region.

Alongside the FTA, the two countries signed a defence cooperation accord covering military training, maritime security, cyber defence, and peacekeeping collaboration.

The signing comes just days after Indonesia finalised a separate trade agreement with the European Union, following nearly a decade of negotiations, signalling Jakarta’s growing role in global trade networks.