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How Indonesia can benefit from EFTA trade deal
The Indonesian Chamber of Commerce and Industry (Kadin) has outlined the opportunities for investment and trade under a recently approved partnership with Iceland, Liechtenstein, Norway and Switzerland.
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Trade Minister Muhammad Lutfi speaks at the House of Representatives after legislators approved the draft bill of the Indonesia-EFTA Comprehensive Economic Partnership Agreement (IE-CEPA) in Jakarta on April 9. (Courtesy of Trade Ministry)
T
he House of Representatives has recently approved a draft trade deal with the four-member European Free Trade Association (EFTA) that is expected to facilitate foreign investment and liberalize trade in goods and services, particularly commodities such as palm oil and raw metals.
The Indonesia-EFTA Comprehensive Economic Partnership Agreement (IE-CEPA) was approved by the House on April 9 and has been called Indonesia’s doorway to the wider European market. The non-European Union trade bloc consists of Iceland, Liechtenstein, Norway and Switzerland.
Shinta Kamdani, deputy chair of the Indonesian Chamber of Commerce and Industry (Kadin), said the agreement was expected to benefit Indonesian businesses that sold gold, nickel, crude palm oil (CPO), coffee, tea, footwear, fisheries products, wood furniture, webbing products and creative economy items.
“While our trade with the EFTA is small relative to our trade with the European Union, the EFTA still holds a strategic position in Europe, even though [the member states] are not EU member states,” Shinta told The Jakarta Post on April 14.
Norway and Switzerland have committed to eliminating 91.04 percent and 81.74 percent, respectively, of their tariffs on imports from Indonesia, accounting for 99.75 percent and 99.65 percent of their total imports from the country, according to a 2019 fact sheet published by the Trade Ministry.
The partnership with the EFTA is the first of its kind involving Indonesia and European countries. The parties signed the agreement in 2018 after seven years of negotiations.
Read also: House approves Indonesia-EFTA trade deal
