Wednesday, 21 Augst 2019 | 12:36 WIB

Indonesia and Chile Exchange Instruments of Ratification

Indonesia Trade Minister Enggartiasto Lukita (kemendag)

JAKARTA NETRALNEWS COM - The Indonesian government continues to strive to diversify its export markets so that it does not depend on major export destination countries such as China, the United States, Japan and others. One thing that has been done to open up new market access is with Chile.

The two countries agreed to establish trade cooperation by exchanging the Instrument of Ratification (IoR) of the Indonesia-Chile Comprehensive Economic Partnership Agreement (IC-CEPA) today, Tuesday (11/6) at the Indonesian Ministry of Trade, Jakarta. IoR exchange is an important legal procedure before the entry into force of IC-CEPA. In accordance with the mandate agreed in the agreement, IC-CEPA will take effect 60 days after the IoR exchange, namely on August 10, 2019.

This has become one of the important steps for the government to increase exports after the government successfully completed the Indonesia Comprehensive Economic Partnership Agreement (IA-CEPA) recently. IC Exchange - CEPA itself was carried out by Minister of Trade Enggartiasto Lukita, and Deputy Foreign Minister for Trade in Chile, Rodrigo Yanez Benitez.

"The implementation of IC-CEPA is a very historic momentum. Besides being the first trade agreement with the South American country, IC-CEPA will also open the door for Indonesian export products in the South American region more easily," Enggar explained in his remarks at the Ministry of Trade Auditorium (Ministry of Trade), Tuesday (06/11/2019).

According to Enggar, the geographical location of Chile which is strategic, will make Chile the connecting country for Indonesia's export products in South America. That way the opportunity to export to South America and surrounding areas will be increasingly wide open
IC-CEPA was signed by the two countries on December 14, 2017 in Santiago, Chile. Through IC-CEPA, both of them will get preference rates for each other to export to markets. After nearly 18 months of ratification in each country, on June 11, 2019 the process was officially completed by the two countries.

For Indonesia, this process was carried out through the issuance of Presidential Regulation No. 11 of 2019, concerning the Ratification of the Comprehensive Economic Partnership Agreement between the Government of the Republic of Indonesia and the Government of the Republic of Chile (Comprehensive Economic Partnership Agreement between the Government of the Republic of Indonesia and the Government of the Republic of Chile).

Enggar said that through IC-CEPA, 89.6 percent of Chile's tariff posts will be eliminated for Indonesian products entering the Chile market. While Indonesia will remove 86.1 percent of its tariff posts for imported products from Chile. The main products of Indonesia that receive preferences include palm oil and its derivatives, paper and pulp, fisheries, food and beverages, automotive products, footwear, furniture, jewelry, sorbitol, textile products, and others.

"After the goods tariff agreement, the next stage is negotiations in services and investment, because IC-CEPA is done in stages. For the deadline, it will be discussed further through the IC-CEPA Joint Committee which will meet in mutual agreement," added Enggar.

For information, the total trade between Indonesia and Chile in 2018 reached US $ 274 million. Meanwhile, for the period January-March 2019 the total trade between the two countries reached US $ 56.1 million with Indonesia's export value of US $ 34.9 million and imports of US $ 21.2 million.

Chile is Indonesia's 55th export destination with total exports of US $ 158.9 million in 2018. This number increased 0.3 percent compared to the previous year of US $ 158.5 million. Indonesia's main export products to Chile are footwear, fertilizers, automobiles, organic surfactants, locust beans, seaweed, sugar beets, and sugar cane. Meanwhile, Chile's main products exported to Indonesia are grapes, copper, chemical pulp, iron ore, fat, and oil and its fraction of fish or marine mammals.