The Indonesia-South Korea Comprehensive Economic Partnership (IK-CEPA) targets a total trade of US$20 billion between both nations, Trade Minister Agus Suparmanto stated.
"Trade between the two countries had reached US$15.65 billion in 2019. This is far from what we are targeting, and now, in 2020, it has decreased to US$10.10 billion. However, with the IK-CEPA, it is expected to increase by around US$20 billion in the following year," the trade minister stated while holding a virtual press conference on Friday.
Suparmanto noted that after the ratification of IK-CEPA, business actors from Indonesia and South Korea would capitalize on various opportunities, so trade is projected to increase by five to 10 percent in the early years.
Thus, the agreement will have a positive impact on the trade in goods between both nations. IK-CEPA will not only boost the trade in goods but will also increase trade in services.
The trade minister affirmed that Indonesia and Korea remain committed to opening 100 service sub-sectors, with up to 100 percent Foreign Equity Participation (FEP).
Furthermore, Korea will liberalize some of its service sectors in future, specifically the franchise, construction, and computer-related services sector.
Suparmanto noted that after the signing on Dec 18, the IK-CEPA agreement will be brought to the Indonesian Parliament for discussion again within 90 days, so that it can be ratified and targeted to be materialized next year.
In 2019, South Korea was the eighth export destination country and the sixth source of imports for Indonesia. The total trade between Indonesia and South Korea in 2019 had reached US$15.65 billion, with Indonesian exports to South Korea amounting to US$7.23 billion and imports from South Korea amounting to US$8.42 billion. The trade trend between the two countries during the 2015-2019 period was recorded to have grown positively by 2.5 percent.
Meanwhile, the value of Indonesia's non-oil and gas exports to South Korea for the January-November 2020 period was recorded at US$5.03 billion. In the meantime, the value of Indonesia's non-oil and gas exports to South Korea was recorded at US$495.4 million in November 2020, a 7.12-percent rise as compared to US$462.5 million in October 2020.
Indonesia's main export products to South Korea comprise coal, briquettes, stainless steel products, plywood, natural rubber, and paper pulp. Meanwhile, Indonesia's imports from South Korea constitute electronic circuits, synthetic rubber, processed steel products, and clothing materials, among others.
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