Indonesia, Canada open talks on comprehensive trade deal

Trade Minister Muhammad Lutfi. - Trade Ministry

JAKARTA (The Jakarta Post/ANN): Indonesia and Canada have opened negotiations over a Comprehensive Economic Partnership Agreement (ICA-CEPA) expected to spur bilateral trade and investment.

Indonesia’s Trade Minister, Muhammad Lutfi, and Canada’s Minister of Small Business, Export Promotion and International Trade, Mary Ng, officially launched the negotiations during a virtual ceremony on Monday (June 21) is an extension of President Joko Widodo’s instruction to have Indonesia actively negotiate international trade deals to open new markets, especially new export markets, amid the pandemic, ” said Lutfi.

The ICA-CEPA marks Indonesia’s second comprehensive trade agreement with a country from the Americas after Indonesia ratified a CEPA with Chile in 2019.

Canada’s and Indonesia’s bilateral trade value is quite small, amounting to just over US$2 billion in 2020, compared with the neighbouring United States, the figure for which amounted to over $27 billion in the same year, according to Statistics Indonesia (BPS) data.

Canada was Indonesia’s 15th biggest foreign investor last year, with investments standing at $175.3 million, according to Investment Coordinating Board (BKPM) data.

In comparison, the US invested $749.7 million, making it the eight biggest investor.

“Once it is concluded, an Indonesia-Canada CEPA will level the playing field and allow Indonesian businesses to compete with exporters from Canada’s other free trade partners, ” said Canadian Ambassador Cameron MacKay in a statement issued by the Canadian Embassy in Jakarta.

Indonesia lags behind Southeast Asian peers Malaysia, Singapore, Vietnam and Brunei, which signed free trade agreements with Canada in 2018 through membership of the Comprehensive Progressive Agreement for the Tran-Pacific Partnership (CPTPP).

The embassy’s statement said that, in 2020, Canada’s top exports to Indonesia were cereals, fertilisers, wood pulp, oilseeds and machinery while its top imports were rubber, electrical and electronic equipment and textiles.

“A comprehensive agreement can provide Canadians with enhanced access to Southeast Asian supply chains, unlock opportunities for world-class Canadian goods and services in this rapidly growing market, and drive long-term job creation and sustainable, inclusive growth for generations to come, ” said Minister Ng, also in the embassy’s statement.

University of Indonesia (UI) economist Fithra Faisal, a specialist in international trade, said the ICA-CEPA would help Indonesian businesses access more non-traditional markets and therefore boost exports, especially from the agricultural and small and medium enterprises (SMEs) sectors.

Fithra added that the ICA-CEPA would give Indonesian businesses more options to source suppliers of raw materials and high-tech goods and to source investors. The Canadian embassy’s statement noted that Canada was the only G7 country with free trade access to every other G7 country.

Canada also has free trade agreements with over 50 countries around the world, including Japan, Vietnam and Singapore.

“This can bring us closer to participating in the global value chain, especially in North America, ” Fithra told The Jakarta Post on Monday. - The Jakarta Post/Asia News Network

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Indonesia , Canada , trade , Muhammad Lutfi , talks


Next In Aseanplus News

China floods: Much of Shanghai shuts down as Typhoon In-fa lashes city
Asean News Headlines at 10pm on Tuesday (July 27)
136 new locally transmitted Covid-19 cases in Singapore; 36 linked to Jurong Fishery Port
Indonesia reports record 2,069 Covid-19 deaths in 24 hours; daily cases hit 45,203 on Tuesday (July 27)
Thailand registers 14,150 new Covid-19 cases; 11th consecutive day cases surpassing 10,000 in country
Covid-19 cases in Metro Manila increased by 47% as Philippines logs 7,186 new infection - highest since June 13
Thailand: Sandbox programme proposes to cut mandatory stay in Phuket to 7 days
Duterte set to push congress on virus recovery and successor
Vietnam firms agree Covid-19 vaccine tech transfer with Japan's Shionogi, says report
Austin in Singapore - US says China's sea claims have 'no basis' in international law

Stories You'll Enjoy