Ministry Of Trade: IP-CEPA Expands Indonesian Market To Peru

Deputy Minister of Trade Dyah Roro Esti Widya Putri. (Photo: Doc. Ministry of Trade)

The Ministry of Trade (Kemendag) said that the Comprehensive Economic Partnership Agreement between Indonesia and Peru (IP-CEPA) could expand the market.

Indonesia di Peru. IP-CEPA sendiri akan fokus pada akses pasar untuk perdagangan barang.

Deputy Minister of Trade of the Republic of Indonesia Dyah Roro Esti Widya Putri said, after the signing of the IP-CEPA, the Government of Indonesia and Peru will immediately carry out a ratification process so that IP-CEPA can be enforced.

"The IP-CEPA implementation also leads to commitments made at the business-to-business level and other stakeholders, including Kadin," said Roro in an official statement, Tuesday, August 12.

Roro explained that IP-CEPA will focus on market access to trade in goods, customs and trade facilities, and solutions to overcome overall trade barriers.

Through this agreement, continued Roro, Indonesia abolished the tariff of around 85 percent of tariff posts for more than 9,700 Peru products. Meanwhile, Peru removed about 87 percent of tariff posts for more than 6,900 Indonesian products.

"For Indonesia, IP-CEPA is the second trade officer with a country in the American region. This shows that Peru is an important country in Indonesia's relations with countries in the American region," he said.

Because this agreement is inkremental, continued Roro, the Ministry of Trade will also negotiate related to investment and services after IP-CEPA is implemented for 2 years to improve bilateral relations between Indonesia and Peru.

Meanwhile, based on the structure of the most approved nation (MFN) tariff, Peru has an average value of 8 percent.

Given that there is as much as 87 percent of the total tariff posts that will be abolished, the opportunity for Indonesia to increase exports is increasingly open, such as footwear, textiles, vegetable and oil fats, as well as mangan dioxide primary cells and primary batteries.

At the same time, continued Roro, Indonesia's potential can also provide benefits for Peru, especially because Indonesia has a large market and strategic position in Asia.

"IP-CEPA will provide zero tariffs for Peru products that will enter Indonesia, such as chocolate, wine, and tara (Caesalpinia spinosa)," he explained.

The preference tariff provision in this IP-CEPA is projected to increase the competitiveness of Peru's agricultural exports in the Indonesian market which continues to increase and follows the development of consumer demand.

Furthermore, IP-CEPA also strategically opens the gate for market access to Southeast Asia through Indonesia. This is in line with the goal of diversifying the economy and integration of Peru to enter the Asia-Pacific region.

Roro also emphasized that to strengthen trade relations in the trade sector, it is necessary to implement several strategies, such as increasing the volume of goods trading; facilitating the transfer of goods trading technology as agreed in the agreement; and building a framework that can strengthen the economy, encourage sustainable aspects, and foster solidarity in overcoming global challenges.

"It's time for us to work together with the spirit of mutual cooperation to monitor and evaluate the implementation of IP-CEPA in the future. Hopefully IP-CEPA will bring us more than just the achievement of numbers, but further touch human relations which are realized through cultural transfer, knowledge, and experience; while creating economic impacts and changing lives for the better," said Roro.

For your information, the total trade between Indonesia and Peru in 2024 was recorded at US $ 480.7 million.

Although quite small, Indonesia's trade with Peru shows an average growth of 15.08 percent per year from 2020 to 2024.

Indonesia's exports in 2024 are worth 331.2 million US dollars and imports are worth 149.6 million US dollars.

Indonesia's leading export products include car motorbikes and other vehicle motorbikes, footwear, palm oil and their derivatives, and refrigerators.

In the period 2020 to 2024, exports grew by an average of 15.4 percent per year

Sementara itu, produk impor Indonesia adalah biji cokelat, briket batu bara, bahan bakar padat, pupuk, anggur, dan seng mentah. Pertumbuhan impor tumbuh rata-rata 13,5 persen per tahun.

Indonesia merupakan ekonomi terbesar dengan populasi 280 juta menunjukkan tingginya potensi pasar untuk produk ekspor Peru, khususnya produk pertanian, termasuk biji cokelat dan anggur.

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Meanwhile, Indonesia's imported products are chocolate beans, coal briquettes, solid fuel, fertilizers, wine, and zinc. Import growth grew by an average of 13.5 percent per year.

Indonesia is the largest economy with a population of 280 million showing the high market potential for Peru's export products, especially agricultural products, including chocolate beans and wine.