JAKARTA (TheInsiderStories) – Since assuming the office in 2014, President Joko Widodo has given a mandate to the Minister of Trade to strive to increase non-oil exports, by concentrating on non-traditional markets as an opportunity to be developed.
‘Non-traditional export markets’ refers to either new export destination countries or those which still have a great chance to trigger trading, amid the threat of U.S. trade protectionism and strict Euro restrictions on tariffs. Some countries that might fit into the category of nontraditional export markets are Chile and other South American states, or those of South Asia.
President Widodo will make a state visit and official visit to five countries in South Asia; Sri Lanka, India, Pakistan, Bangladesh and Afghanistan. The President will also attend the ASEAN-India Summit in New Delhi which will discuss the maritime sector and international and regional issues.
President Jokowi conducted a State Visit to Sri Lanka on Jan. 24-25, 2018 at the invitation of President Maithripala Sirisena, and held bilateral discussions there.
Jokowi pointed out that in recognition of the vibrant maritime connectivity between Sri Lanka and Indonesia, there is a wide range of issues of mutual interest pertaining to trade and investment, as the two leaders discussed and reaffirmed their commitment to deepen and broaden economic collaboration.
Recalling the establishment of formal diplomatic relations over 65 years ago, they expressed satisfaction for the vibrant, strong bonds of friendship that exist between the two countries, and agreed to further consolidate and expand relations.
They also acknowledged the need to harness the untapped potential which exists in the bilateral economic sphere, and emphasized the need for the early establishment of a Joint Working Group on Trade and Investment.
Next Friday (26/1), Indonesia and Pakistan will sign an amended Preferential Trade Agreement (PTA) in Islamabad, which incorporates unilateral trade concessions granted by the country on 20 items.
Major exports items from Pakistan include tobacco, textile fabric, rice, ethanol, citrus (kinnow), woven fabric and mangoes. The amended PTA would help to increase the volume of bilateral trade, which is currently around US$2.4 billion.
Pakistan would export 65,000 tons of rice to Indonesia as part of the agreement. The remainder would be given to an Indian company. Last week, Indonesia floated a tender for procurement of 500,000 metric tons of rice out of which 84,000 metric tons were to be sourced from South Asia.
The two countries share many similarities in their demographics, and trade could cross mark of $5 billion annually comfortably from a current US$2.4 billion.
While in India, Indonesia Minister of Trade Enggartiasto Lukita confirmed that his government would raise important issues at the ASEAN-India Business and Investment Meet & Expo momentum, in the effort to approach completion of Regional Comprehensive Economic Partnership (RCEP) negotiations.
The RCEP is a free trade pact consisting of 16 countries, covering nearly half the world’s population. Member countries include ten ASEAN nations (Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam) with six partner countries (Australia, China, India, Japan, South Korea, and New Zealand).
The completion of RCEP negotiations is expected to provide youth employment opportunities, promote sustainable growth and inclusive development, and spur innovation to improve peoples’ living standards.
South Asia, especially India, is a huge and potential market. In 2016, the total trade between Indonesia and India amounted to US $ 12.98 billion. Meanwhile, from January-November 2017 it amounted to US $ 16.55 billion. Indonesian products supplied to India mostly take the form of commodities, such as coal, CPO, copper, rubber, tin, and others.
According to World Bank data, with intra-regional trade at less than 5 per cent of total trade, South Asia is the least-integrated region in the world, dwarfed by East Asia’s 35 per cent and Europe’s 60 per cent. It’s 20 per cent cheaper for India to trade with Brazil than with its neighbor Pakistan. Bangladesh’s exports to India could potentially rise by 300 per cent.
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