KOTRA, a non-profit agency under South Korea’s Ministry of Trade, Industry, and Energy, operates through 129 global offices, including its key centers in Jakarta and Surabaya. These Korea Business Centers (KBCs) function as trade and investment facilitators, connecting businesses and fostering bilateral opportunities between South Korea and Indonesia.

To ensure businesses benefit from existing agreements, KOTRA Jakarta established its FTA Support Center, which provides resources to navigate trade mechanisms and preferential agreements. The implementation of IK-CEPA and the Regional Comprehensive Economic Partnership (RCEP) in January 2023 has further expanded market access, reduced tariffs, and simplified customs procedures between Indonesia and South Korea.

The IK-CEPA is particularly significant, as it eliminates or reduces tariffs across a wide range of industries, streamlining trade processes and encouraging cross-border investments. At the same time, RCEP – the world’s largest free trade agreement – brings together ASEAN countries, South Korea, China, Japan, Australia, and New Zealand, further enhancing regional economic integration and cooperation.

KOTRA Jakarta plays a key role in educating businesses, particularly exporters, on essential processes to ensure smooth trade. One of these includes the use of the Certificate of Origin (Form AK) under the ASEAN-Korea FTA (AKFTA). Issued in English and valid for 12 months, Form AK helps businesses claim preferential tariffs when exporting goods to South Korea, reducing trade costs while maintaining competitiveness.

During the COVID-19 pandemic, Indonesia adopted digital submission for Form AK, ensuring that trade continued seamlessly despite restrictions. This innovation underscored the adaptability and resilience of bilateral economic ties.

KOTRA Jakarta also focuses on empowering Indonesia’s Micro, Small, and Medium Enterprises (MSMEs), recognizing their vital role in economic development. Through targeted consultations and workshops, MSMEs are equipped with knowledge of trade regulations, tariff benefits, and compliance requirements, allowing them to access South Korea’s dynamic market with greater ease.

A representative from KOTRA Jakarta emphasized the agency’s role in strengthening bilateral economic relations, stating that KOTRA aims to ensure businesses can fully utilize agreements such as IK-CEPA and RCEP to boost competitiveness and foster sustainable growth.

The agency’s efforts have contributed to stronger trade ties, with businesses from both countries taking advantage of reduced tariffs, simplified processes, and expanded access. Indonesian exporters, in particular, are now better positioned to navigate South Korea’s markets efficiently, while Korean investors benefit from new opportunities to operate in Indonesia’s growing economy.

By addressing challenges such as non-tariff barriers and promoting understanding of trade regulations, KOTRA Jakarta continues to play a pivotal role in supporting businesses and driving economic collaboration between Indonesia and South Korea.

As trade agreements evolve and bilateral relations deepen, initiatives such as KOTRA’s FTA Support Center remain instrumental in ensuring businesses on both sides can seize new opportunities for growth and partnership.

Popular

The fragile promise of pluralism, religious freedom in Southeast Asia

Furniture exporters decry new quarantine rule

BRICS shows internal rifts as ministers fall short of joint statement