New trade deal expected to boost Indonesia’s exports to Middle East
The Agreement on the Indonesia-United Arab Emirates (UAE) Comprehensive Economic Partnership Agreement (IUAE-CEPA) is expected to boost trade and Indonesia’s investment performance with Gulf and Middle Eastern countries.
Jakarta (VNA) – The Agreement on the Indonesia-United Arab Emirates (UAE) Comprehensive Economic Partnership Agreement (IUAE-CEPA) is expected to boost trade and Indonesia’s investment performance with Gulf and Middle Eastern countries.
The trade deal was signed by Indonesian Minister of Trade Zulkifli Hasan and Minister of Economy of the UAE Abdulla bin Touq Al Marri on July 1, on the sidelines of President Joko Widodo’s working visit to Abu Dhabi.
The Indonesian President positively welcomes the completion of the IUAE-CEPA, said Trade Minister Hasan in a statement. This agreement is Indonesia’s entry point to the UAE, which is a hub for increasing exports to non-traditional destination countries, such as the Gulf, Middle East, Africa, and South Asia.
The signing of the IUAE-CEPA is also a historic moment, as it is the first time that Indonesia has a trade agreement with a country in the Gulf region.
He said he hopes that when the IUAE-CEPA takes effect, improvement of the performance of the trade and investment sectors, driven by the IUAE-CEPA, can further accelerate post-pandemic economic recovery and increase Indonesia’s competitiveness.
Meanwhile, Director General of International Trade Negotiations at the Indonesian Ministry of Trade Djatmiko Bris Witjaksono remarked that the IUAE-CEPA negotiations were immensely beneficial for Indonesia, one of which was market access to the UAE through reducing and eliminating import duty rates of around 94% of the total tariff posts.
The issue of Islamic economics in the IUAE-CEPA has also become a historical record for Indonesia. This is because, for the first time, the issue of Islamic/sharia economics has been included as one of the scopes of a comprehensive economic partnership agreement with Indonesia’s trading partner countries.
In 10 years, Indonesian exports to the UAE are projected to rise by 844.4 million USD, or an increase of 53.90%. In addition, Indonesia’s imports from the UAE are projected to increase by 307.3 million USD, or around 18.26%
Total trade between Indonesia and the UAE in 2021 had reached 4 billion USD, an increase of 37.88% as compared to 2.9 billion USD2 in 2020.
Indonesia’s main exports to the UAE are jewelry and parts thereof, palm oil and its derivatives, motor vehicles, electronic equipment for cellular telephones, and reception apparatus for television.
Indonesia’s imports from the UAE last year reached 2.1 billion USD, a year-on-year increase of 27.33 percent, with imported semi-finished products made of iron or steel, unforged aluminum, gold, sulfur, and propylene polymer./.