MONTREAL: Canada has signed a bilateral free trade agreement with Indonesia, which aims to eliminate or reduce tariffs on over 95 per cent of Ottawa's exports to its largest market in South-East Asia.
Several experts told AFP the strategic agreement is being made in the context of global economic turmoil, exacerbated by the protectionist policies of the United States.
"This is the right deal at the right time with the right partner," Canada's Prime Minister Mark Carney said, adding Indonesia is "Canada's largest export market in South-East Asia."
Indonesian President Prabowo Subianto called it a "historic moment" during a visit to Ottawa, as the agreement is the first of its kind with an Association of Southeast Asian Nations (Asean) member country.
"I'm very lucky to be the Indonesian president who brings this back to Indonesia," Prabowo said Wednesday (Sept 24).
Canada's exports include wheat, potash, timber and soybeans.
The Comprehensive Economic Partnership Agreement (CEPA) allows Canada to strengthen its presence in the Pacific region, in line with the strategy that was unveiled by the previous administration under Justin Trudeau.
The deal also provides for the elimination of more than 90 per cent of tariffs on Indonesian imports, a boon to the export of garments and leather goods to the North American market.
Simultaneously, a defence cooperation accord was signed aimed at strengthening collaboration in military training, maritime security, cyber defence and peacekeeping.
The signing came just a few days after Jakarta and the European Union finalised a trade agreement after nearly a decade of talks.
An analyst told AFP that signing two trade deals within a week would make Indonesia more resilient to volatility under tariffs imposed by US President Donald Trump.
The agreements "signalled a partner diversification strategy to minimise the risk of global tariff volatility, but it doesn't mean that Indonesia is abandoning the US market," said Syafruddin Karimi, an economist from Andalas University. - AFP
