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Indonesia looks to boosting exports to Latin American markets through IC-CEPA
Indonesia expects to expand its export markets in Latin America through a "Chilean hub" under the CEPA.
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Indonesian and Chilean delegates participate in the second round of negotiations on the Indonesia-Chile Comprehensive Economic Partnership Agreement (CEPA) on March 13, 2017, in Jakarta. (Courtesy of/Trade Ministry)
The government is urging exporters to explore other markets to expand their business and benefit from the Indonesia-Chile Comprehensive Economic Partnership Agreement (IC-CEPA), which enters into force on Aug. 10.
The IC-CEPA removes Chile's import tariffs for 7,669 Indonesian products and Indonesia's tariffs for 9,308 Chilean products.
The agreement is expected to increase bilateral trade between Indonesia and Chile to US$369.2 million by 2024, from $274.1 million in 2018. Meanwhile, Indonesian exports to Chile are expected to increase by 65 percent to $262.4 million.
The Trade Ministry’s bilateral negotiations director, Ni Made Ayu Marthini, said the IC-CEPA was a breakthrough for Indonesia, as the trade agreement was the first that it had ever inked with a Latin American country.
“Chile produces subtropical agricultural products that do not compete with, but complement, Indonesia’s tropical products,” Made said at a press briefing on Monday. “Indonesia has been left behind in the [Latin American] region by other Southeast Asian countries that were there first, such as Vietnam and Malaysia.”
The product with the largest export potential to Chile is footwear, which is projected to grow from $40 million last year to $95.3 million in the next five years. Following footwear is automobiles and automotive components with projected growth from $13 million to $38.7 million, apparel and accessories (from $10 million to $22.7 million) and machinery (from $13 million to $18 million).
