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Indonesia, South Korea conclude CEPA talks
Fast friends: South Korean President Moon Jae-in (left) and his wife Kim Jung-sook (second left) greet President Joko “Jokowi” Widodo (second right) and his wife Iriana before a welcome dinner during the ASEAN-Republic of Korea Commemorative Summit in Busan, South Korea, on Monday
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ast friends: South Korean President Moon Jae-in (left) and his wife Kim Jung-sook (second left) greet President Joko “Jokowi” Widodo (second right) and his wife Iriana before a welcome dinner during the ASEAN-Republic of Korea Commemorative Summit in Busan, South Korea, on Monday.(AFP/Ahn Young-joon)
Indonesia and South Korea have concluded negotiations for the Indonesia-Korea Comprehensive Economic Partnership Agreement (IK-CEPA), which were reactivated in February, making it the fastest trade agreement
Indonesia has made.
Trade Minister Agus Suparmanto and his South Korean counterpart Yoo Myung-hee issued the joint declaration on the conclusion of the IK-CEPA negotiations on Monday in Busan, South Korea.
The declaration took place on the sidelines of the ASEAN-Korea Commemorative Summit and was witnessed by President Joko “Jokowi” Widodo and his South Korean counterpart Moon Jae-in.
"I hope that this document will be signed in early 2020. The IK-CEPA is a symbol of the commitment of the two countries to economic openness," Jokowi said in a statement on Monday.
"In the midst of a difficult situation like this [in the global economy], efforts to strengthen cooperation between us become more important.”
In addition to the simmering trade war between the United States and China, Southeast Asia must also brace for a potential fallout from trade tensions between South Korea and Japan, which have removed each other from their respective “white lists” of favored export destinations.
The IK-CEPA negotiations began in 2012 but were halted in 2014. In February 2019, Jakarta and Seoul agreed to immediately reactivate the negotiations and to complete talks over its substantive matters by October.
Within a span of eight months from reactivation to finalization, the IK-CEPA became the fastest comprehensive economic partnership agreement that Indonesia completed with one of its trading partners.
Following Monday's declaration, the two countries are to continue the legal scrubbing of the texts of the agreement — which is to finish in February 2020 — so that the IK-CEPA can be signed in the first half of 2020, according to a statement from the Trade Ministry.
"The completion of the IK-CEPA is a new milestone in the economic relations of Indonesia and South Korea. More than just a free trade agreement, the IK-CEPA is a comprehensive partnership between the two countries in terms of trade in goods and services, investment, rules of origin and economic cooperation,” Agus said.
The trade agreement was built on the existing ASEAN-Korea Free Trade Agreement (AKFTA) signed in 2006, but Agus said the agreement would also provide broader market access for Indonesia.
"With the IK-CEPA, Indonesia will get wider market access compared to what has been provided through the AKFTA," he said.
Through the IK-CEPA, Agus said, Indonesia's industrial, fishery and agricultural products would get better access to the South Korean market. On the other hand, Indonesia would also provide market access to industrial raw materials that facilitate South Korean investment in Indonesia so that the partnership between the two would be mutually beneficial.
In terms of services, South Korea is to open employment opportunities for Indonesian professionals and experts, while Indonesia would provide wider market access for the construction, distribution, online games and health services sectors.
The head of the Trade Ministry's international trade negotiations, Iman Pambagyo, who led Indonesia’s negotiating team, said that comprehensive partnerships under the IK-CEPA were also manifested in the framework of cooperation and capacity building in various sectors, including industry, creative economy, health and labor.
"The IK-CEPA is hoped to contribute positively to the transformation of Indonesia's economy into a developed country through increased investment, economic cooperation and technical assistance, as well as by encouraging the transfer of knowledge and technology from South Korea, including improving labor quality standards," Iman said.
In addition to completing the negotiations, South Korea also offered to help Indonesia relocate its capital city, with Moon saying that “moving the capital is the government [of Indonesia’s] focus in this second period".
"I hope this cooperation can develop a new capital city of Indonesia that is smart, green, safe, inclusive and resilient," Jokowi said.
Moon voiced a willingness to share his country's experience of relocating government offices to the administrative city of Sejong, Yonhap news agency reported.
The two leaders also discussed the Indo-Pacific concept, with Moon expressing his appreciation of Indonesia’s initiative in the region by convening the Indo-Pacific Infrastructure and Connectivity Forum next year.
