I

ndonesia and South Korea are hoping to conclude negotiations on the establishment of an economic partnership agreement in October, to further strengthen their economic relations.

Trade Minister Gita Wirjawan said in Jakarta on Thursday that both countries might agree to form a relatively small package for the Comprehensive Economic Partnership Agreement (CEPA), to speed up negotiations.

Kicking off negotiations in July last year, earlier this month both countries carried out the fifth round of talks in Seoul.

'€œWe'€™ve conveyed our expectation that South Korean firms in the areas of automotive and electronics, particularly telecommunication devices, can bring big investment into Indonesia,'€ Gita told reporters at his office.

The minister added the Indonesian government had told Korea it would oppose the opening of its services sector, particularly automotive-related services, to Korean firms unless there was a bold commitment for investment in the local automotive industry.

Indonesia also expects Korea to liberalize its maritime and agriculture sectors for Indonesian produce as both areas are closed for foreign exports to help protect farmers, according to the trade minister.

Gita, along with Coordinating Economic Minister Hatta Rajasa and Industry Minister MS Hidayat, met with South Korea President Park Geun-hye and some Korean businesspeople in Seoul on Wednesday and discussed ways to improve bilateral economic ties.

The bilateral economic relations between Indonesia and Korea, which recently celebrated 40 years of diplomatic relations, have grown sharply in past years, partly due to the increase in the amount of direct investment from Korean firms.

Korean investment reached an all-time high last year of US$1.95 billion in 421 projects, up 59.84 percent from 2011.

The Korean steel giant POSCO, in cooperation with Indonesia'€™s largest steel maker Krakatau Steel, has since 2011 been building a steel plant with a total investment of about $6 billion in Cilegon, Banten.

Korean tire maker Hankook Tire recently finished the initial phase of its investment in a tire plant project expected to reach $1.1 billion by 2018. Honam Petrochemical Corp., Asia'€™s second-largest petrochemical producer, also plans to invest up to $5 billion to build a petrochemical complex in Cilegon, Banten.

Trade also surged considerably, up by 20.54 percent on average annually from 2008 to $27.02 billion last year, with Indonesia exporting $15.05 billion and importing $11.97 billion.

Industry officials, however, did not share Gita'€™s optimism. Many did not want the government to rush to sign the agreement until Korea made concrete investment plans, said Industry Ministry director-general for international industry cooperation Agus Tjahajana.

'€œThe Korean government has not yet made any commitments, but we will keep asking for their investment commitment. Our stance is no investment, no deal,'€ he told The Jakarta Post in a text message.

'€œWe are now waiting their proposal and will not rush. If we sign the agreement immediately, it will directly come into effect although there is no certainty investment will come,'€ Agus added. He said despite this condition, the possibility of sealing the pact with Korea at the end of October would still be open as talks went on.

Minister MS Hidayat said in spite of absence of investment deal at present, Indonesian officials would push the issue of investment during ongoing discussions with their counterparts.

'€œWe are now working closely with the Korean minister of trade, industry and energy,'€ he said in a text message.