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Iran, Indonesia conclude negotiations on bilateral trade agreement

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Tasnim News - 20 May 2023

Iran, Indonesia conclude negotiations on bilateral trade agreement

The Ministry of Trade of Indonesia has announced that Jakarta and Tehran have successfully completed the final stage of negotiations on a bilateral trade agreement.

The two countries are set to sign the trade agreement during an upcoming visit to Jakarta by Iranian President Ebrahim Raisi.

According to a statement from the Ministry of Trade of Indonesia, the agreement will be called the Indonesia-Iran Preferential Trade Agreement II-PTA. The signing ceremony is scheduled to take place during Iranian President Ebrahim Raisi’s visit to Jakarta from May 22-24.

Johnny Marta, Director of Bilateral Negotiations at the Ministry of Trade of Indonesia, expressed the significance of the agreement, stating, "Tehran is a non-traditional business partner for Jakarta. By signing this agreement, we hope to expand our export opportunities and market scope."

Indonesia aims to diversify its export options and reduce reliance on traditional trading partners by seeking new markets. The country plans to accelerate its economic recovery from the COVID-19 pandemic by boosting exports.

The Middle East, along with Africa, South Asia, South America, and Eastern Europe, are among the regions that Jakarta considers important for trade partnerships.

In addition to the upcoming trade agreement with Iran, Indonesia has previously signed the Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates in July last year. The Indonesian government has been actively pursuing similar cooperation with other Persian Gulf countries, including Saudi Arabia.

The Ministry of Trade of Indonesia highlighted that bilateral trade between Iran and Indonesia reached $54.1 million in the first quarter of this year. The value of bilateral trade increased by over 23% in the previous year, amounting to $257.2 million.

Major Indonesian exports to Iran include motorcycles, auto spare parts, industrial products, and wood fibers. On the other hand, Iran exports dates, grapes, carbonates, plant alkaloids, and various other products to Indonesia.

The two countries have also concluded negotiations on a mutual trade article, enabling them to engage in barter trade, exchanging goods and services without relying on traditional currency settlement. This arrangement ensures that trade between Tehran and Jakarta can continue even in the face of challenges in accessing commonly used international currencies, such as the US dollar.

 source: Tasnim News