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Taking advantage of ASEAN-Korea Free Trade Agreement
Countries that engage in free trade are increasingly apt to grow faster, innovate, improve productivity and provide higher income and more opportunities to their people, which can spur the economic growth of the respective countries.
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Pocheon Trade Mission, 2019
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ountries that engage in free trade are increasingly apt to grow faster, innovate, improve productivity and provide higher income and more opportunities to their people, which can spur the economic growth of the respective countries. But to go in this direction, what should a country do?
Signing a foreign trade agreement (FTA) with its trading partners must, certainly, be the answer. But most importantly, as many countries have experienced, the FTA scheme should be put into practice.
Thanks largely to its engagement in international trade, the Republic of Korea (South Korea) has achieved remarkable economic development.
Korea’s trade relation with other countries, including Indonesia, is facilitated by the Korea Trade-Investment Promotion Agency (KOTRA).
KOTRA has served as the bridge to close the gap between fast-growing businesses in Indonesia and Korea.
According to a spokesman for KOTRA, the agency’s role here in Indonesia is to support and promote Korea’s small and medium enterprises (SMEs) in the local market, promote Korean products, support Korean companies and Korean talents who work overseas, overseas market information production, consulting and much more.
KOTRA acknowledged the importance of open trade, saying, “When the entire world is connected as a global village, the FTA has become a major [player] in international commerce.”
“Korea has become a top 10 trading partner for Indonesia,” the spokesman said.
According to KOTRA, FTAs are contributing to economic development by promoting trade and easing tariffs and non-tariff barriers between member states on goods, services and investments.
“FTAs constitute the vast majority of regional trade agreements and are rapidly increasing in the world trade market,” KOTRA explained.
“The Republic of Korea is actively pursuing more FTAs in step with global economic trends.”
The incredible economic development contributed through the aforementioned international trade has prompted Korea to continue to expand the number of its trade partners to create a new future.
This explains why the ASEAN-Korea FTA Framework Agreement was signed, with the agreement aimed at strengthening and promoting economic, trade and investment cooperation between Korea and the 10 countries of ASEAN.
“The ASEAN-Korea FTA is the first free trade agreement that Korea has signed with a mega economic zone,” KOTRA said.
The ASEAN-Korea FTA includes goods and services and investment, which accelerates trade between the two parties for various fields.
Like in many other countries, South Korea through its embassy in Indonesia, established an ASEAN-Korea FTA support center in Jakarta to enable local people, especially buyers, to take advantage of the agreement. The center was set up at the KOTRA office located in Wisma GKBI, Central Jakarta.
Explaining further how Indonesian buyers can take full advantage of the ASEAN-Korea FTA support center and the services it offers, KOTRA said the center served as a help desk on the bilateral FTA between South Korea and the Southeast Asian country.
“The Republic of Korea runs FTA support centers worldwide, providing advice and counsel on making the most of FTAs,” KOTRA said.
“The KOTRA Jakarta FTA Support Center provides free counseling services for Korean companies and local Indonesian buyers to help them tackle non-tariff barriers and make the most of ASEAN-Korea’s FTAs.”
Apart from that, it also offers a full range of support, from issuing a certificate of origin to addressing any grievances in customs and certification procedures.
“Korean companies and Indonesian buyers can apply for seminars and on-site counseling services for free. However, during the COVID-19 pandemic, all seminars and on-site free counseling services are conducted online,” KOTRA said.
Tariff reduction
KOTRA also explained how the center could benefit Indonesian importers. Tariff reduction is one of the benefits.
“For imports of products from Korea to Indonesia, importers can take advantage of the ASEAN-Korea Free Trade Agreement scheme to get preferential tariffs,” the agency said.
“By using the ASEAN-Korea FTA, Korean companies and Indonesian buyers can enjoy reduced tariffs if they fulfill certain conditions stipulated during the joint trade agreement signed by South Korea, Indonesia and other ASEAN countries.
It said further that the KOTRA Jakarta FTA Support Center would later provide various facilities and services to the community and Indonesian MSME entrepreneurs related to the ASEAN-Korea FTA.
“This way, the presence of the support center in Jakarta can help Indonesian businesses that import products from South Korea to get relief from import duties, which will undoubtedly have an impact on better profits for both countries,” the spokesman for KOTRA said.
Visit KOTRA Jakarta’s Instagram account @kotra.jakarta and YouTube channel, KOTRA Jakarta Official, for the latest information regarding events and products and other interactive information related to the ASEAN-Korea FTA. You can also contact KOTRA Jakarta via email at jakarta@kotra.or.kr.
