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EFTA trade deal 10 days to go

Indonesia is expected to sign the comprehensive economic partnership agreement with European Free Trade Association (EFTA) countries as part of the efforts to improve access to nontraditional markets

Rachmadea Aisyah (The Jakarta Post)
Jakarta
Fri, December 7, 2018

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EFTA trade deal 10 days to go

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span>Indonesia is expected to sign the comprehensive economic partnership agreement with European Free Trade Association (EFTA) countries as part of the efforts to improve access to nontraditional markets.

The agreement with EFTA countries is one of the three trade deals the government is expected to conclude this year. The two others are a Comprehensive Economic Partnership Agreement (CEPA) with Australia and a preferential trade agreement (PTA) with Mozambique.

“Regarding the Indonesia-EFTA CEPA, we have scheduled the signing for next weekend at the Trade Ministry office,” the Trade Ministry’s director general for international trade negotiations, Iman Pambagyo, said referring to Dec. 16 as the date of the signing, at a recent press briefing.

The EFTA’s members are four European countries that are not part of the European Union, namely Iceland, Liechtenstein, Norway and Switzerland.

Through the trade deal with EFTA countries, Indonesia will get broader market access to sell products such as fish products, textiles, furniture, electronics, tires as well as coffee and palm oil.

The trade deal will also allow Indonesians to access more training.

EFTA countries will also increase investment in energy and mining, machinery, agriculture, infrastructure, forestry and chemical industries in Indonesia.

Meanwhile, the Trade Ministry’s director for bilateral trade negotiations, Ni Made Ayu Marthini, said the government should set out extra measures when entering nontraditional markets, especially in smaller countries such as those in Africa.

“Many of our nontraditional destinations have high tariffs [...] but smaller market capacity, so they usually prefer us to invest there first,” Made said. “That is why we tend to aim at PTAs first so they would have a preference for us before moving to higher levels of partnership.”

For instance, she said, both Indonesian private and state companies had entered Nigeria and Tunisia and established investments there in many fields, such as food and construction.

“After we have established our presence, it would be easier for us to build trust between the two sides. We will have more intense communication [...] so we can promote our commodities there with less competition,” said Made.

The government has envisioned that through its efforts, Indonesia will become the regional trade hub for Southeast Asia by 2020.

“We have also been building Jakarta as the commercial and diplomatic capital of ASEAN,” Iman said. “We hope that by becoming more active in international trade, we can place ourselves as the center of trade in the region.”

Meanwhile, responding to uncertainties from the trade feud between the world’s two largest economies, the United States and China, the government is committed to continue expanding trade and strive for completion of more trade deals.

Indonesia, which sees the two behemoths as its main trade partners, has remained wary over the feud even though US President Donald Trump and China’s President Xi Jinping agreed to de-escalate the trade war last weekend at the G20 summit in Buenos Aires.

Iman emphasized that despite the turmoil, the Indonesian government would keep focus on its trade goals.

“We have been monitoring the development [of the trade war], but for Indonesia, we will focus on our own agenda,” Iman told reporters at a recent press briefing. “We will keep on improving trade with both traditional and nontraditional partners, as well as go on trade missions and intensify bilateral trade talks.”

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