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IE-CEPA ratification to be completed in 2020
Indonesia and European Free Trade Association (EFTA) countries expect to finish ratification of the Indonesia-EFTA Comprehensive Economic Partnership Agreement (IE-CEPA) next year, an official has said
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span>Indonesia and European Free Trade Association (EFTA) countries expect to finish ratification of the Indonesia-EFTA Comprehensive Economic Partnership Agreement (IE-CEPA) next year, an official has said.
“Indonesia and EFTA countries are currently in the process of ratifying the IE-CEPA. We need to work hard to complete it in order to ensure that the agreement takes effect in 2020,” Deputy Foreign Minister AM Fachir said at the 2019 Indonesia-EFTA Business Forum in Jakarta on Monday.
After seven years of negotiations, Indonesia and the four EFTA countries — Switzerland, Iceland, Norway and Liechtenstein — signed the IE-CEPA last December in hopes of further improving economic ties between Indonesia and EFTA members.
Between 2014 and 2018, Indonesia’s exports to EFTA countries grew 267 percent, while the Indonesia-EFTA trade balance increased 73 percent, according to Fachir. In 2018 alone, the balance of Indonesia-EFTA trade was US$2 billion.
“Although the figures show a positive trend every year, there is still plenty of room for improvement. I believe the IE-CEPA will strengthen our economic partnership,” Fachir said.
Fachir said he hoped that under the IE-CEPA, EFTA countries could facilitate access for more Indonesian products into the European market.
“The IE-CEPA will help guide Indonesia, Switzerland, Iceland, Norway and Liechtenstein through global economic uncertainties,” he added, referring to the ongoing economic disruption caused by the United States-China trade war.
While the ratification process is under way, Fachir urged Indonesian business players to prioritize building an open and effective communication to allow better understanding between government, the public and private entities; establishing a closer engagement with partners in the EFTA countries; and making effective use of the IE-CEPA.
“I observe that many Indonesian entrepreneurs have not tapped into the EFTA market demand yet. They are focusing more on working with traditional markets in European Union countries. So, we need more forums to get involved with each other,” he said.
He also called on EFTA countries to invest more in Indonesia, which, under President Joko “Jokowi” Widodo’s leadership, has been striving to improve the investment climate in the country.
“Indonesia has a democratic governance system which has contributed to political stability. That is certainly good for the business community because it will help create greater certainty regarding government policies,” Fachir said.
The Trade Ministry’s director for bilateral negotiations Ni Made Ayu Marthini said the IE-CEPA would not work out well without the support of Indonesia’s business community. “This agreement lays only a foundation. To make it work, it needs help from all parties, especially businesspeople of Indonesia and EFTA countries,” she said.
Erwin Bollinger, Switzerland’s bilateral economic relations division head and federal council delegate for trade agreements, also speaking at Monday’s business forum, said the IE-CEPA aimed to support inclusive and sustainable economic development for the sake of Indonesia’s prosperity.
“The agreement promotes investment and creates a stable framework and has legal certainty,” Bollinger said.
