Indonesia-GCC Free Trade Agreement
Indonesia will sign the Indonesia-Gulf Cooperation Council Free Trade Agreement (I-GCC FTA) on July 31, 2024. Indonesia's Minister of Trade, Zulkifli Hasan, welcomes this initiative and is optimistic that it will enhance Indonesia's exports to the Gulf region.
Negotiations and Expectations
Zulkifli Hasan, commonly known as Zulhas, stated, "We welcome the launch of the I-GCC FTA negotiations. We hope this launch will strengthen cooperation between Indonesia and the Gulf countries, especially in the trade and investment sectors."
The signing of the Joint Statement on the Launching of the Negotiation on the Free Trade Agreement between the Republic of Indonesia and the Gulf Cooperation Council by Zulhas and GCC Secretary-General Jasem Mohamed Albudaiwi will mark a significant moment, initiating the first round of negotiations in September. The signing will be held at the Ministry of Trade's office at 15:00 WIB.
Indonesia's Government Strategy
Zulhas highlighted that the GCC is Indonesia's strategic trading partner. "This step will open up greater opportunities for Indonesian products, not only in the Gulf countries but also in other Middle Eastern regions, Africa, and Europe," he said.
Director-General of International Trade Negotiations at the Ministry of Trade, Djatmiko Bris Witjaksono, added that the I-GCC FTA is Indonesia's third trade agreement with a partner in the Middle East, following agreements with the United Arab Emirates and Iran. "The I-GCC FTA is expected to support economic growth for both parties by enhancing market access for goods, services, investment, economic cooperation, and Islamic economic cooperation," Djatmiko elaborated.
Export and Import Potential
Total trade between Indonesia and the GCC during January-May 2024 reached USD 6.2 billion, with Indonesia's exports recorded at USD 2.7 billion and imports at USD 3.5 billion. In 2023, total trade between Indonesia and the GCC was USD 15.7 billion, with significant export commodities including cars, palm oil, jewellery, beacons, and paper.
The main non-oil and gas import commodities from the GCC include semi-finished products of iron or non-alloy steel, acyclic alcohols, sulphur, ethylene polymers, and unwrought aluminium.
This agreement is expected to significantly increase market access and economic growth in Indonesia and GCC countries as well as in other regions such as Africa and Europe.
Conclusion
The Indonesia-GCC Free Trade Agreement is a strategic step anticipated to enhance the penetration of Indonesian products in international markets and strengthen bilateral economic relations. The government is optimistic that this cooperation will benefit both parties significantly.
Comments