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RI, Turkey to begin talks on trade deal
Indonesia and Turkey have agreed to commence talks on a comprehensive economic partnership agreement (CEPA) in December, as the two countries seek to dramatically jack up bilateral trade
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ndonesia and Turkey have agreed to commence talks on a comprehensive economic partnership agreement (CEPA) in December, as the two countries seek to dramatically jack up bilateral trade.
Trade Minister Enggartiasto Lukita said agreement on the start of negotiations had been reached following recent mutual visits by the leaders of the two countries.
“One particular agreement has come up, namely to allow CEPA negotiations to begin very soon, this year,” he said when meeting Turkish Deputy Prime Minister Fikri Isik during the opening of the 8th session of the Joint Commission for Economic and Technical Cooperation on Thursday.
President Joko “Jokowi” Widodo visited Turkey in July, following a visit by Turkish President Tayyip Erdogan to Indonesia back in 2015.
The presidents envision a more than sevenfold increase in two-way trade to US$10 billion by 2023 from $1.3 billion last year.
The CEPA negotiations were targeted to conclude in 12 to 18 months, said the Trade Ministry’s director general for international trade negotiations, Iman Pambagyo.
The CEPA would be ratified in 2019 and become effective in late 2019 or early 2020, he added.
Iman further said that the two parties aimed to strike a deal on trade in goods first and to let that deal enter into force before continuing talks on other issues.
“After [the trade in goods deal] is done and implemented, we could start negotiations on services and investment, whenever the time and momentum are right,” he said.
Indonesia eyed to increase access to Turkey for some of its key commodities, like palm oil and rubber, Iman explained.
Indonesian exports to Turkey have declined at an average rate of 8.27 percent per year from 2012 to 2016, Trade Ministry’s data show.
Officials have attributed the decline to the absence of a free-trade agreement (FTA) between the two countries, leading to considerable import duties on Indonesian products.
Indonesian palm oil and rubber, for instance, are struggling to compete with similar commodities from Malaysia, a country that already has an FTA with Turkey.
In addition, Turkey imposes antidumping duties on some Indonesian products, including air conditioners and motorcycle tires.
Indonesian exports to Turkey are dominated by manmade staple fiber, filaments, rubber, paper, electronics, palm oil, vehicle and spare parts and footwear, according to data from Trade Map of Geneva-based International Trade Center.
Indonesian imports from Turkey are dominated by tobacco, machinery, mineral products, wheat, electronics and chemicals.
During the meeting, the Turkish deputy prime minister demanded that the two countries embrace closer economic cooperation that could bring about more balanced trade.
Turkey suffered a $712.9 million deficit in its trade with Indonesia last year, according to Trade Ministry data.
“We understand that our bilateral trade can be carried to a higher level in a balanced manner,” Isik said during the meeting.
The meeting of Joint Commission for Economic and Technical Cooperation, held on the sidelines of the 2017 Trade Expo Indonesia (TEI) at the Indonesia Convention Exhibition (ICE) in BSD, Tangerang, is expected to spur investment cooperation in various sectors, such as energy, defense, food processing and ecotourism.
In a separate development, the trade minister also met up with Nigerian Transportation Minister Rotimi Amaechi, who is seeking a partnership pertaining to the railway system in his country as well as to improve bilateral trade with Indonesia.
Indonesia aims to boost its non-oil-and-gas exports by 5.6 percent to $138.65 billion this year, and as of August, it has booked $98.8 billion, or 71.2 percent, of that goal.
The government hopes to see deals totaling $1.1 billion clinched during TEI, Indonesia’s largest annual trade expo, which runs from Wednesday to Sunday. Visitors on foreign delegations from 12 countries have committed to buying $16 million worth of goods on the first day and Rp 2.05 trillion ($151.6 million) on the second day, with demand coming in particular from African countries and the Middle East.
