Taking Advantage Of South American Market Opportunities, Indonesia-Peru Launch Partnership Agreements

Indonesian Minister of Trade Zulkifli Hasan and Minister of Foreign Trade and Peru Tourism Juan Carlos Mathewsmen signed a mutual agreement. (Doc of the Ministry of Trade)

JAKARTA - Indonesian Minister of Trade Zulkifli Hasan and Minister of Foreign Trade and Peru Tourism Juan Carlos Mathewsmen officially launched negotiations on the Indonesia-Peru Comprehensive Economic Partnership Agreement (Indonesia'Peru Comprehensive Economic Partnership Agreement or IP-CEPA).

The negotiations were launched today, Tuesday, August 15, 2023, virtually. The launch of the negotiations was marked by the signing of the script "Joint Ministerial Statement on the Launch of the Negotiations towards a Comprehensive Economic Partnership Agreement between Indonesia and Peru".

The manuscript was signed virtually by Trade Minister Zulkifli Hasan in Jakarta, Indonesia and Minister Juan Carlos Mathewsmen in Lima, Peru.

"This Indonesia-Peru CEPA negotiations are an important basis for both countries to strengthen economic relations and trade cooperation," said Trade Minister Zulkifli Hasan, Tuesday, August 15.

"We hope that this agreement will provide significant benefits for the people of Indonesia and Peru, as well as encourage sustainable economic growth in Asia and South America," he said.

Zulhas, as Zulkifli Hasan is familiarly called, said that the launch of the IP-CEPA negotiations showed the seriousness of the Indonesian Ministry of Trade in working on non-traditional export markets, one of which was to the South American region, according to the direction of President Joko Widodo (Jokowi).

"The trade agreement with Peru will expand market access for Indonesian products in the South American region, encourage the opening of new investment opportunities and employment opportunities, and provide benefits for small and medium enterprises (SMEs)," he said.

The World Bank predicts Peru to become the second-ranked country with the fastest and stable economic growth in the South American region in 2023.

Meanwhile, the Minister of Foreign Trade and Tourism of Peru, Carlos Mathewswas, said the IP-CEPA would be proof of increasing cooperation commitments between Indonesia and Peru. He also hopes that the IP-CEPA can increase market access for superior products of each country.

"It is hoped that through this agreement, we can increase market access for superior products between the two countries and strengthen cooperation in various economic sectors with Indonesia. This agreement will be a historic milestone in the economic relationship between Indonesia and Peru," said Juan Carlos.

On the same occasion, the Director General of International Trade Negotiations at the Indonesian Ministry of Trade, Djatmiko Bris Witjaksono, added that IP-CEPA is one proof of the Government's commitment to open non-traditional market access.

Indonesia through the Ministry of Trade is committed to opening up access to non-traditional markets with a strong economic profile in the South American region. Furthermore, we hope that the Indonesia-Peru CEPA trade agreement can follow the success of the Indonesia-Chile CEPA trade agreement which has succeeded in increasing the trade value of the two countries, especially Indonesia's exports to Chile," said Djatmiko.

For your information, Indonesia-Peru CEPA will be carried out in stages (incremental). The negotiation round will begin with the discussion of trade in goods, followed by trade in services, investment, and various other areas of cooperation.

Trade Minister Zulkifli Hasan and Minister Juan Carlos are optimistic that the IP-CEPA agreement will become the basis for closer economic cooperation between Indonesia and Peru. Both believe that IP-CEPA will be a magnet for investment and business for business actors.

Indonesia and Peru agreed to hold the first round of negotiations by the end of 2023. Indonesia and Peru also hope that the negotiating team of both parties can complete the goods trade negotiations within one year.

Indonesia-Peru Trade

The total trade between Indonesia and Peru for the January 'May 2023 period was recorded at 191.8 million US dollars, consisting of Indonesia's exports to Peru amounting to 158.4 million US dollars and Indonesia's imports from Peru amounting to 33.3 million US dollars. Indonesia has a surplus of 125.1 million US dollars.

In the last five years (2018), Indonesia has consistently recorded a trade surplus against Peru with a 21.8 percent trend.

Meanwhile, in 2022 the total trade between Indonesia and Peru reached 554.5 million US dollars. Indonesia's exports to Peru were recorded at 442.7 million US dollars and Indonesia's imports from Peru 111.8 million US dollars. Indonesia has a surplus against Peru of 330.9 million US dollars.

For your information, Indonesia's main export products to Peru include motorized vehicles, footwear, mineral fertilizer, biodiesel and its derivatives, and tissue.

Meanwhile, Indonesia's main imported commodities from Peru are chocolate seeds, mineral fertilizer, coal, wine, and vegetable extraction.