Minister Of Trade Zulhas: Indonesian Economic Cooperation With Eurasia Must Be Entangled

Photo: Doc. Antara

JAKARTA - Minister of Trade (Mendag) Zulkifli Hasan emphasized that the economic cooperation between Indonesia and the Eurasian Economic Union (EAEU) must be strengthened.

To that end, the agreement for free trade (FTA) between the two countries must be finalized. This was revealed at a meeting of Zulkifli with members of the Indonesian Economics and Integration Council (Eerosian Economics Commission) Sergei Glazyev in Jakarta, Friday 27 January.

"I congratulate Indonesia and EAEU members for launching the IEAEU-FTA Negotiation last December. The launch of the FTA Indonesia-EAEU negotiations is a historic momentum to improve bilateral relations to a higher level," Zulkifli said in his official statement quoted from Antara.

The IEAEU-FTA negotiations were officially launched by the Minister of Trade of the Republic of Indonesia and members of the Council of Trade Ministers of EAEU on December 5, 2022 online. Currently, the two parties are still preparing a reference draft for the IEAEU-FTA negotiations.

The first round of negotiations is planned to be held in the first quarter of 2023, namely in March/April this year and is targeted to be completed within two years.

Some coverage of the issue of negotiations in the IEAEU-FTA includes trade in goods, rules of origin of goods (rules of origin), trade security (trade remedies) trade facilitation procedures (customs procurement and trade facility), sanitation and fitness, intellectual property rights, technical barriers to trade, business competition, and digital trade.

At the meeting, the two ministers also discussed the Indonesia-EEC Joint Working Group (JWG). Zulkifli said that Indonesia and the EEC had a Cooperation Note to form JWG as a discussion forum on technical cooperation in order to increase trade and investment.

"Indonesia welcomes various initiatives in order to optimize the potential for bilateral economic relations, it is very important for both parties to resolve negotiations as soon as possible," said Zulkifli.

The Memorandum of Cooperation (MOC) was signed on October 17, 2019, on the sidelines of the Trade Expo Indonesia. The memorandum of cooperation will be used as the basis for starting technical cooperation in various fields to increase trade and investment and reduce barriers between the two parties.

Meanwhile, Minister Sergei revealed that although the bilateral trade relationship was good enough, there was still room to improve.

"The FTA agreement and technical cooperation discussions under the Cooperation Note are expected to drive trade and two-way investment flows," Sergei said.

In the January-November 2022 period, total trade between Indonesia and EAEU reached 4 billion US dollars, up 32.75 percent compared to the same period the previous year. Meanwhile, in 2021, trade between the two countries was recorded at 3.33 billion US dollars.

In this period, Indonesia's exports to EAEU were recorded at 1.52 billion US dollars, while Indonesia's imports from EAEU were recorded at 1.82 billion US dollars.

Indonesia's main exports to EAEU include palm oil, copra coconut oil, balata natural rubber, leather footwear, and margarine. Meanwhile, Indonesia's imports from EAEU include mineral/chemical fertilizer (kalinem), half-made steel products, fero alloys, briquette coal, and mineral/chemical fertilizer (nitrogen).

In 2021 EAEU will occupy its 30th position as a source of direct foreign investment (FDI) in Indonesia with an investment value of 23.2 million US dollars consisting of 214 projects. This value increased by 404.49 percent compared to 2020 which was recorded at 4.6 million US dollars.