Take Advantage Of IC-CEPA, Indonesian Entrepreneurs Flooded With Trade Contracts Worth 5.8 Million US Dollars

Illustration (Photo: Doc. Antara)

JAKARTA - Trade Minister Zulkifli Hasan is optimistic that exports to Latin America will increase after the signing of the Indonesian Comprehensive Economic Partnership Agreement (IC-CEPA) scheme.

This was marked by the signing of five business contracts worth US$5.8 million or equivalent to Rp90 billion for Indonesia's exports to Chile.

The signing of the business contract has been carried out in stages on November 15-17, 2022 virtually.

This was conveyed by Trade Minister Zulifli Hasan after watching a video recording of the signing of the trade contract of entrepreneurs between the two countries.

"We welcome the signing of a business contract worth US$5.8 million by Indonesian and Chilean business actors who take advantage of the opening of the Chile market with the IC-CEPA scheme. A number of commodities that will be exported in the business contract are cars, ceramic furniture, as well as food and beverage," he said in an official statement, quoted on Tuesday, November 22.

Zulhas, as Zulkifli Hasan is familiarly called, invites Indonesian business actors to be observant about open market opportunities through the agreement.

"We hope that more business actors are observant about the opportunity of the Chile market and the more Indonesian products are finally circulating in Chile," he said.

The Indonesian companies that have entered into trading contracts this time are PT. Mitsubishi Motors Krama Yudha Indonesia (PT. MMKI), PT Sango Ceramic Indonesia, PT. Kalbe International, Kaya.ID, and PT. Kultiva Indonesia Makmur.

PT. MMKI managed to get the first export order to Chile for the products of Car Xpander and Xpander Cross through its trading partner, Mitsubishi Motor Corporation for Latin America Region. The automotive sector is one of Indonesia's leading sectors in utilizing the IC-CEPA scheme.

Furthermore, PT. Sango Ceramic Indonesia to export ceramic food utensils with its trading partner Sodimac, one of the largest household appliance retail companies in Latin America.

Then PT. Kalbe International, which is one of Indonesia's largest pharmaceutical companies with ARP Chile SpA for Extra Joss energy drink products.

Furthermore, Kaya.ID is working with Elbelmen Chile for organic rice products. Finally, PT. Kultiva Indonesia Makmur for cooperation in exporting healthy snack products with various flavors with its partner Itochu Chile. The Santiago Indonesian Trade Promotion Center (ITPC) Office also facilitates the negotiation process to the result of this business cooperation. The head of ITPC Santiago Indah Fajarwati said that this trading contract is a concrete example of the use of IC-CEPA for business actors. ITPC Santiago is ready to help business actors interested in developing their market to Latin America, especially Chile. "This trade contract is a concrete manifestation of the use of product preferential rates in IC-CEPA. We certainly hope that more Indonesian business actors will be able to enter the Latin American market, including Chile," said Indah.

Chile is a hub that can be the entry point for Indonesian products into Latin America.

Since the implementation of the IC-CEPA in August 2019, there has been a very significant increase in the value of Indonesia's trade with Chile.

The high level of trade in goods utilization in the IC-CEPA scheme shows that both Indonesian and Chilean companies have used this approval scheme quite a lot.

ITPC Santiago noted, the level of trade utilization in 2020 will reach 80 percent and in 2021 it will reach 77 percent.

Previously, Trade Minister Zulkifli Hasan and Deputy Minister Ahumada held bilateral meetings to increase trade between the two countries. Furthermore, the two Ministers signed the IC-CEPA Services Trade Protocol Amendment.

At first glance, Indonesia-Chile Trade, Chile is Indonesia's 46th export destination country in 2022.

Meanwhile, as an import partner, Chile ranks 49th as the import country of origin.

Based on data from the Central Statistics Agency, in the January period September 2022, the value of Indonesia's exports to Chile has reached 253.99 million US dollars, an increase of 43 percent compared to the same period in 2021.

Meanwhile, the value of Indonesia's imports from Chile in the January-September 2022 period was 179.4 million US dollars.

Thus, Indonesia has recorded a trade surplus of US$74.59 million with Chile in that period.

Indonesia's main export products to Chile in 2022 are footwear, fertilizers, motorized vehicles, organic surface-active agents; locust beans, seaweed, sugar bits, and sugar cane.

Meanwhile, Indonesia's main imported products from Chile in 2022 are fresh and dry wine, copper, chemical wood porridge, iron ore, as well as fish or marine fats and oils.