D

uring his courtesy call to Industry Minister MS Hidayat on Tuesday, the new South Korean Ambassador to Indonesia, Cho Tae-yong, stated his intention to resume talks on a bilateral comprehensive economic partnership agreement (CEPA), which had reached a stalemate due to disagreements over a direct investment scheme.

Cho '€” who replaced Kim Young-sun as ambassador to Indonesia in late May '€” told reporters after the brief meeting with Hidayat that the CEPA would be among his priorities during his tenure and promised to give his best effort to help realize the plan.

'€œAs an ambassador, I will do my best to further strengthen the relationship between Indonesia and Korea,'€ said Cho, who was South Korea'€™s deputy foreign minister before being posted to Jakarta.

'€œI will consult closely with the Indonesian government to see the conclusion of the CEPA as soon as possible. I will bring as many Korean companies as possible [to Indonesia],'€ he added.

The Indonesia-South Korea CEPA aims to further liberalize trade beyond that sealed by Indonesia with the East Asian economy along with its nine fellow members of ASEAN. That would further cut 1,051 tariff lines uncovered by the ASEAN-South Korea trade pact.

Hidayat on Tuesday reiterated that the partnership was still considered a losing-out trade pact for Indonesia, hence an agreement may not be reached soon.

Duty reduction that Indonesia demands from South Korea only covers US$150 million in exports. In stark contrast, a similar cut that South Korea wants from Indonesia would affect $530 million in outbound shipments.

Instead, given the importance of the CEPA for both nations, the ministry would hold an inter-session meeting with Korean representatives before the next formal discussions on the scheme commenced.

Up to the seventh round of talks '€” the last of which was held in Seoul in February '€” some sticking points emerged repeatedly and have remained unresolved.

'€œWe'€™ve tried to balance the [duty reduction] disparity by trying to entice them to invest in areas that can help to boost competitiveness and reduce our imports, such as in petrochemicals, telecommunications and steel '€” but the other party says that it cannot guarantee its commitment to such a scheme,'€ Hidayat said.

The South Korean government previously argued that it could not agree to the proposal because any decision made on investment was in the hands of the private sector.

South Korea'€™s investment in Indonesia has jumped in recent years and hit a record high of $2.21 billion last year. Bilateral trade has expanded by 15.57 percent on average to $23 billion last year from 2009.

Indonesia'€™s exports, which primarily consist of liquefied natural gas, bituminous coal, crude oil, natural rubber and copper ore, rose by only 8.94 percent.

In contrast, its imports '€” diesel, gasoline, textiles, steel and synthetic rubber '€” surged by 24.96 percent.