JAKARTA (TheInsiderStories) – Indonesia and European Free Trade Association (EFTA) to sign Comprehensive Economic Cooperation Agreement (IE-CEPA), in December of 2018, in Jakarta, said one senior official. The negotiations themselves take around seven years time.
The signing of agreement on the final negotiations was carried out by Trade Minister Enggartiasto Lukita along with four EFTA State ministers, consisting of Switzerland, Liechtenstein, Iceland and Norway on Friday (11/23). This signing marks the completion of negotiations between Indonesia and EFTA countries through the IE-CEPA scheme.
“This settlement is a milestone for Indonesia’s relations with the four EFTA countries,” the minister said in a written statement on Sunday (11/25).
With IE-CEPA, Lukita said, market access between Indonesia and EFTA will be wider. These include services, investment, economic cooperation and capacity building.
In goods trade, Indonesia also will gain an increase in market access to EFTA. Among them are fishery products, industries (textiles, furniture, bicycles, electronics, and car tires), as well as agriculture (including coffee and oil palm).
In services, market access for Indonesian workers (Intra Corporate Trainees, Trainees, Contract Service Suppliers, Independent Professionals, and Young Professionals) to EFTA will be more open. For example, the service sector that will benefit include professional services, telecommunications, finance, transportation, and education.
Indonesia will also gain an increase in investment from EFTA member countries in the energy and mining sectors, machinery, agriculture, fisheries, forestry, chemical industry, and others.
In addition, the country will get cooperation and capacity building. For example in the fisheries and aquamarine sector, export promotion, tourism, cocoa, sustainability, maintenance, repair and overhaul, vocational education, and others.
“With the completion of the IE-CEPA, it is expected that the utilization of existing market shares in each country can be optimized as well as the entrance to the EU market,” he said.
Enggar also hopes that this agreement can create a foundation to catch up with other ASEAN countries. In particular, the Philippines and Singapore have completed trade agreements with EFTA.
The agreement was welcomed by the chairperson of Indonesian Employers Association Benny Soetrisno. He said, “We have to compete with our other neighboring countries. Especially with countries that are far more aggressive in opening up international markets such as Vietnam.”
Statistics Indonesia data shows that EFTA is the 23rd non-oil and gas export destination and the 25th largest non-oil and gas import country for Indonesia. In 2017, Indonesia-EFTA trade reached US$2.4 billion, which is the value of exports to EFTA amounted to $1.31 billion and imports $1.09 billion. Thus, Indonesia is still experiencing a trade surplus of $212 million.
Indonesia’s main exports to EFTA include jewelry, optical devices, gold, telephone equipment, and essential oils. While Indonesia’s main imports from the European countries are gold, turbo-jet engines, medicines, fertilizers, and industrial raw material blends.
In the investment sector, the investment value of EFTA member countries in Indonesia in 2017 reached $621 million.
Indonesia is hoping to seal at least 13 bilateral and regional trade agreements, followed by CEPA with several countries. The move aims to improve and widen market access for Indonesia’s exports.