Indonesia, Peru to conclude trade pact this November
Jakarta Globe - 30 May 2024
Indonesia, Peru to conclude trade pact this November
By Jayanty Nada Shofa
Indonesia and Peru are aiming to secure their bilateral trade deal this November as both countries seek larger market access outside their continents.
The two economies kicked off the negotiations for their bilateral comprehensive economic partnership agreement (CEPA) in Peru on Monday. The four-day first round of talks will focus on the goods sector, covering rules of origin, market access, dispute resolution, to name a few. The trade pact negotiations with Peru were timely as Indonesia had been wanting to grow its list of export destinations.
“Peru is a non-traditional trade partner for Indonesia that boasts a quite big potential. Peru can connect Indonesian goods into Central America and South America,” Johni Martha, a senior official at the Trade Ministry, was quoted as saying in a press statement on Thursday.
Peruvian Foreign Trade Minister Elizabeth Galdo said the Indonesia-Peru CEPA would be mutually beneficial. She added: “It is not about trade, but it will expand Peru’s presence in Southeast Asia and the same goes for Indonesia in Latin Americas. The CEPA will benefit both sides.”
Government data shows Indonesia-Peru trade amounted to $97.4 million in the first three months of 2024. Indonesia enjoyed a $30.43 million surplus with Peru over the said period. Bilateral trade totaled $444.4 million throughout 2023, during which Indonesia also booked a surplus worth $290.4 million.
Peru is still far from being Indonesia’s top trading partner. The Latin American country is Indonesia’s 45th largest export destination in the non-oil and gas sector. According to the Trade Ministry, Indonesia’s top exports to Peru in 2023 were vehicles ($144 million), biodiesel ($31.8 million), footwear ($44.9 million), and paper ($13.2 million). Indonesia mainly imported cacao beans ($33.1 million) and fresh or dry grapes ($19.7 million) from Peru.
Indonesia is not only banking on the Peru CEPA deal to enter the Latin American market. Jakarta has been eyeing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This trade bloc includes Latin American countries such as Chile, Mexico, and Peru. Indonesia, however, has yet to express a formal intent of joining.
The government recently reported that Indonesia had been witnessing a positive overall trade balance for four years in a row since May 2020.
