Cooperating With Canada, Indonesia Launches Trade Negotiations With ICA-CEPA, Trade Minister Lutfi: They Are Equal And Strategic Partners

Minister of Trade, M. Lutfi. (Photo: Doc. Ministry of Trade)

JAKARTA - The Ministry of Trade (Kemendag) cooperates with Canada to increase trade between the two countries. This is demonstrated by the launch of the Indonesia-Canada Comprehensive Economic Partnership Agreement (ICA-CEPA). The launch of these talks took place virtually today.

Trade Minister Muhammad Lutfi said the agreement was a milestone in the 69-year relationship between the two parties. This agreement is expected to support economic growth, trade and investment, including creating jobs for the community.

"The establishment of these negotiations was carried out by the two countries with the awareness and hope that the establishment of the ICA-CEPA can provide various benefits of trade and investment opportunities for business actors from both countries as a whole," he said in a written statement, Monday, June 21.

Lutfi said this effort was carried out as one of the strategies to strengthen foreign cooperation relations between Indonesia and Canada as important and strategic equal partners. Especially, said Lutfi, in the midst of world geopolitical changes that move very dynamically.

Just to note, this agreement is a strategic effort to open up opportunities for greater penetration of Indonesian products in North America, considering that Indonesia currently only has one trade agreement in the Americas, namely with Chile in South America.

"This is a follow-up to President Joko Widodo's directive so that Indonesia actively forms international trade negotiations with potential trading partners in order to open up new market opportunities, especially to create export opportunities in the midst of a pandemic," he explained.

Meanwhile, Director General of International Trade Negotiations Djatmiko Bris Witjaksono said the two countries gave instructions for the negotiating team to immediately prepare technical matters before starting the negotiations. The first round is planned before the end of 2021.

During the first quarter of 2021, said Djatmiko, the two countries have conducted a series of intensive online discussions to discuss various potential issues that will be included in the agreement.

The issues to be discussed include market access for trade in goods, trade in services, investment, economic cooperation, including various other trade-related areas that will be discussed further by the two parties in the negotiations.

"The government hopes that with ICA-CEPA, Indonesia can increasingly compete with neighboring countries in the Southeast Asia region that have previously had trade agreements with Canada or who have joined the Trans-Pacific Partnership Trade Agreement (CP TPP)," said Djatmiko.

For information, based on data from the Central Statistics Agency (BPS), Canada is ranked 32 as Indonesia's export destination country and ranked 16 as a source country for Indonesia's imports with a total trade of 2.4 billion US dollars in 2020.

In that period, Indonesia's total exports to Canada were recorded at 789.1 million US dollars, while imports from Canada were recorded at 1.6 billion US dollars. Canadian investment in Indonesia in the last five years was recorded at 718 million US dollars consisting of the mining, hotel and restaurant sectors, as well as logistics.