Trade Minister Zulhas: Trade Agreement With Korea Encourages Investment Improvement

JAKARTA - Minister of Trade (Mendag) Zulkifli Hasan continues to encourage the use of trade agreements between Indonesia and South Korea so that it is maximized to increase trade and investment value.

According to him, the trade agreement currently has, namely the Indonesia-South Korea Comprehensive Economic Cooperation Agreement (IK-CEPA), the ASEAN-South Korea Comprehensive Economic Cooperation (AKFTA), and the Regional Comprehensive Economic Partnership (RCEP), have given momentum to increase trade.

"South Korea is an important trading partner of Indonesia. Both countries have trade agreements such as IK-CEPA, AKFTA, and RCEP. This means that the two countries have all requirements to increase the value of trade and investment," said Trade Minister Zulkifli Hasan as quoted by ANTARA, Sunday, May 19.

In a bilateral meeting with South Korean Trade Minister Inkyo Cheong in Arequipa, Peru, Saturday, May 18 local time, Indonesia is pushing for increased use of IK-CEPA which can provide better market access commitments compared to regional trade agreements.

He asked South Korea to provide its support for the Indonesian accession process to the Economic Cooperation and Development (OECD) during the OECD Ministerial Council Meeting (MCM).

According to him, Indonesia's accession to OECD will not only support the national development agenda, but will also contribute to the objectives of OECD to improve cooperation and global economic welfare.

In addition, South Korea is expected to increase investment in Indonesia, one of which is by investing in the capital city of Nusantara (IKN).

"It is hoped that the value of South Korea's investment in Indonesia will continue to increase in the next five years," he said.

Meanwhile, in the electric car development sector, Zulkifli appreciates South Korea's investment in Indonesia and wants to increase investment so that Indonesia can become the center of Korean electric car manufacturers that have export capacity to the Middle East.

In the January-March 2024 period, the total trade between the two countries reached 5.1 billion US dollars. In that period, Indonesia's exports to South Korea were recorded at 2.7 billion US dollars, while Indonesia's imports from South Korea were recorded at 2.4 billion US dollars so that Indonesia had a surplus of 0.2 billion US dollars.

Meanwhile, in 2023, the total trade between the two countries reached 20.8 billion with the value of Indonesia's exports to South Korea being recorded at 10.3 billion US dollars, while Indonesia's imports from South Korea were recorded at 10.5 billion US dollars.

Indonesia's main export commodities to South Korea include coal, petroleum gas, copper ore, monitors and projectors, and fatty acids.

Meanwhile, Indonesia's main imports from South Korea include petroleum oil, electronic integrated circuits, cars and other motorized vehicles, stove burners for liquid fuel, as well as synthetic rubber and factifics obtained from oil.