The FTA negotiation between Indonesia and the EAEU (IEAEU-FTA) is a historic momentum to elevate bilateral relations to a higher level.

Jakarta (Indonesia Window) – Indonesia’s Trade Minister Zulkifli Hasan has had the FTA negotiation with the Eurasian Economic Union (EAEU) completed soon.

The minister made the remarks at a meeting with a member of Board - Minister in charge of Integration and Macroeconomics of the Eurasian Economic Commission/EEC, Sergei Glazyev, here, Friday.

“I congratulate Indonesia and the members of the Eurasian Economic Union/EAEU) for the launch of the Indonesia-Eurasia Economic Union-Free Trade Agreement (IEAEU-FTA) negotiation last December,” Minister Zulkifli said.

According to the minister, the FTA negotiation between Indonesia and the EAEU (IEAEU-FTA) is a historic momentum to elevate bilateral relations to a higher level.

Previously, the IEAEU-FTA negotiation was officially launched by the Indonesian minister of trade and members of the EAEU Council of Trade Ministers on Dec. 5, 2022 online.

Currently, the two parties are still drafting the terms of reference for the IEAEU-FTA negotiation. The first round of negotiation is scheduled to take place in the first quarter of 2023, namely in March/April this year with a target of completion within two years.

Some of the scope of negotiation issues in the IEAEU-FTA include trade in goods, rules of origin, trade remedies, customs procedures and trade facilitation, sanitation and phytosanitary, intellectual property rights, technical barriers to trade, business competition, and digital trade.

At the meeting, the two parties also discussed the Indonesia-EEC (European Economic Community) Joint Working Group (JWG).

The trade minister said that Indonesia and the EEC have had a Memorandum of Cooperation (MoC) to form the JWG as a discussion forum on technical cooperation in the context of increasing trade and investment.

"Indonesia welcomes various initiatives in order to optimize the potential of bilateral economic relations as they are very important for both parties to complete the negotiation as soon as possible," the trade minister said.

The Memorandum of Cooperation (MoC) was signed on Oct. 17, 2019 on the sidelines of the Trade Expo Indonesia (Indonesia's largest trade exhibition).

The MoC will serve as a basis for initiating technical cooperation in various fields to increase trade and investment and reduce barriers between the two parties.

Meanwhile, Sergei Glazyev said that although the bilateral trade relations have been already quite good, there are still opportunities for developing.

“The FTA and discussions on technical cooperation under the Memorandum of Cooperation are expected to encourage two-way trade and investment flows," he added.

In the January-November 2022 period, the total trade between Indonesia and the EAEU reached 4.0 billion U.S. dollars, up 32.75 percent compared to the same period of the previous year.

In 2021, the trade between the two parties was recorded at 3.33 billion dollars. In this period, Indonesia's exports to the EAEU were recorded at 1.52 billion dollars, while Indonesia's imports from the union were booked at 1.82 billion dollars.

Indonesia's main exports to the EAEU include palm oil, copra coconut oil, balata natural rubber, leather footwear, and margarine. Meanwhile, Indonesia's imports from the EAEU include mineral/chemical fertilizers (potassium), steel semi-finished products, ferrous alloys, coal briquettes, and mineral/chemical fertilizers (nitrogen).

In 2021, the EAEU occupies the 30th position as a source of foreign direct investment (FDI) for Indonesia with an investment value of 23.2 million dollars consisting of 214 projects. This value increased 404.49 percent compared to that in 2020, which was recorded at 4.6 million dollars.

Reporting by Indonesia Window