Indonesia, South Korea sign CEPA in Seoul

Jakarta (ANTARA) – Indonesian Trade Minister Agus Suparmanto and South Korean Minister of Trade, Industry, and Energy Sung Yun-mo inked the Indonesia-South Korea Comprehensive Economic Partnership Agreement (IK-CEPA) in Seoul.

“I believe the IK-CEPA will make the Indonesian economy stronger, more competitive, more open, and more attractive for South Korean investors by turning Indonesia into a production hub for the regional and global markets,” Suparmanto stated at a virtual function marking the signing of the agreement in Jakarta on Friday.

The agreement inked during the COVID-19 pandemic demonstrated both nations’ commitment to mutually forging economic relations amid the global economic situation replete with challenges in the past few years, he remarked.

In this context, the IK-CEPA is expected to help expedite both nations’ economic recovery, he affirmed.

IK-CEPA comprises the trade of goods including tariff reduction and elimination, origin of goods, customs procedures, trade facilities and trade remedies, and trade of services covering investment, economic cooperation, and institutional arrangement.

In the trade of goods, South Korea will eliminate 95.54 percent of its tariff posts, while Indonesia will remove 92.06 percent of its tariff posts.

South Korea will abolish tariffs on several Indonesian products, including raw material for lubricant, stearic acid, t-shirts, blockboard, dry fruits, and seaweed, while Indonesia will do away with tariffs on South Korean products, including gear box of vehicles, ball bearings, and paving, hearth, or wall tiles, unglazed.

Under the agreement, Indonesia will also provide tariff preference to facilitate South Korean investment in Indonesia as much as 0.96 percent of the tariff post worth US$254.49 million, or 2.96 percent of Indonesia’s total imports from South Korea.

In terms of its import value, South Korea will eliminate tariffs for 97.3 percent of its imports from Indonesia, while Indonesia will eliminate tariffs for 94 percent of its imports from South Korea.

In the trade of services, both countries are committed to opening more than 100 sub-sectors and increasing the integration of several service sectors in future, including the construction sector, post and courier service, franchise, and computer-related services, and facilitate intra-corporate transferees (ICTs), business visitors (BVs), and independent professionals (IPs).

The IK-CEPA may open a new stage of partnership between the two nations through increased trade of goods and services, investment, and capacity building to benefit from the global economy expected to recover in 2021.