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Indonesia, Turkey take first step toward FTA

Jakarta Post

Indonesia, Turkey take first step toward FTA

By Mustaqim Adamrah, The Jakarta Post, Jakarta

20 September 2008

Indonesia and Turkey have pledged to enhance their economic partnership, introducing a plan to formulate a comprehensive trade and economic partnership — an initial step toward a free trade agreement.

The two-way economic mission aims to achieve US$5 billion in bilateral trade by 2011, according to the Trade Ministry’s director general for international trade cooperation Gusmardi Bustami.

"Our meeting with Turkey positively concluded that both sides were willing to enhance our trade and investment," he told The Jakarta Post on Friday from Istanbul, Turkey, via SMS.

"We aim to boost our trade value to $5 billion within the next three years."

The pledge was made after a two-day meeting with the Turkish Business Council in Istanbul, according to a press statement released by the Trade Ministry.

The meeting, attended by 50 Indonesian and Turkish businesspeople, concluded on Thursday.

According to Gusmardi, the two-way total trade between the two countries stood at $1.78 billion in 2007, with $309 million in surplus for Indonesia.

He said $780.9 million was recorded as the bilateral trade value for the period between January and May this year, up by 47.8 percent from the same period in 2007.

The Istanbul pledge was a follow-up to the Turkish prime minister’s visit to Indonesia in 2006 when the two countries agreed to increase bilateral trade to $2 billion annually, Trade Minister Mari Elka Pangestu said in the statement.

Gusmardi said the new pledge would be carried out mid next year when a Turkish team, headed by a minister, is scheduled to visit Indonesia with a trade mission.

"Next year’s meeting is to make the two countries’ trade mission happen," he said.

With enhanced economic partnership, Mari said, Indonesia could become one of Turkey’s destination countries for investment as Indonesia offered "natural resources and a large population, as well as a stable economic climate".

Indonesia-Turkey Business Council chairman Cetin Candan said Indonesia’s geographical position meant the country could become Turkey’s gateway to the ASEAN market, as well as to the broader Asian and Australian markets.

He said Turkey should take advantage of Indonesia’s coal outputs, as Indonesia is the world’s second largest coal producer after Australia.

Turkish businessmen expressed interest in investing in the mining sector, and the base metals, metal products, machinery and electronics industries, Candan said.

"Turkish businesses also want to import food, paper, furniture and crops to meet Turkey’s demand," he added.