Indonesia hopes to boost exports with South Korea through IK-CEPA

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Jakarta(ANTARA) –
The Indonesian government plans to expand exports to South Korea through the Indonesia-South Korea Comprehensive Economic Partnership Agreement (IK-CEPA), which has been in effect for a year.

Deputy Trade Minister Jerry Sambuaga said at the Korea-Indonesia Economic Partnership Forum in Jakarta on Wednesday that coal has been Indonesia’s main export to South Korea, with exports reaching $2.2 billion in 2023, followed by petroleum gas with exports of $1.4 billion.

However, with the implementation of IK-CEPA, the export potential of other products such as motor vehicles, palm oil, ferronickel, palm kernels, etc. has increased significantly.

Indonesia’s five main imports from South Korea are petroleum, automobiles and motor vehicles, electronic integrated circuits (chips), and synthetic rubber.

“If you look at the trend, I believe this is not limited to the five main products that Indonesia and South Korea trade, but it could expand to more,” Sambuaga said.

He urged Indonesian business people to make full use of IK-CEPA.

Benefits of the trade agreement include the elimination of import tariffs on 95% of products traded between the two countries.

“With the duty-free facility, hopefully the trade volume between Indonesia and South Korea will continue to increase,” Sambuaga said.

He added: “As partner countries that have established diplomatic relations for 50 years, we want to make it clear that there are still many areas to be explored between Indonesia and South Korea, especially since IK-CEPA has only been in effect for one year.”

On the same occasion, South Korea’s Deputy Ambassador to Indonesia Park Soo-deok said that although South Korea has become Indonesia’s main partner in economic cooperation, it still needs to deal with challenges such as geopolitical tensions and unstable supply chains.

Therefore, expanding bilateral cooperation, including Korean companies’ investment and business activities in Indonesia, is of great significance for creating jobs and promoting Indonesia’s economic growth.

South Korea is one of Indonesia’s strategic trading partners. In 2023, South Korea ranked eighth among Indonesia’s export destinations and sixth among Indonesia’s import sources.

Data from Statistics Indonesia showed that Indonesia’s trade with South Korea was US$20.8 billion in 2023, with Indonesia’s exports at US$10.3 billion and imports at US$10.5 billion.

Despite the considerable total trade volume between Indonesia and South Korea, Indonesia’s trade deficit with South Korea reached US$224 million.

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