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Strengthening Indonesian Exports to South Korea under IK-CEPA, Ministry of Trade Issues Trade Ministerial Regulation Number 57 of 2022

Jakarta, Indonesia Sentinel – Minister of Trade Zulkifli Hasan said that the Ministry of Trade has issued ‘Regulation of the Minister of Trade Number 57 of 2022 concerning Provisions on the Origin of Indonesian Goods and Provisions on the Issuance of Origin Certificate Documents for Goods of Indonesian Origin Under the Comprehensive Economic Partnership Agreement Between the Government of the Republic of Indonesia and the Government of the Republic of Korea’ on December 16, 2022. The regulation will come into force on January 1, 2023.”

The issuance of Minister of Trade Regulation No. 57 of 2022 marks Indonesia’s readiness to take advantage of export facilitation in a new chapter of Indonesia’s bilateral relations with South Korea. Business actors are expected to take advantage of export opportunities within the IK-CEPA framework during the Covid-19 recovery period to boost Indonesia’s trade performance with South Korea, especially by fulfilling the provisions on the origin of goods and procedures for making Certificate of Origin Documents for exported goods from Indonesia,” said Trade Minister Zulkifli Hasan.

IK-CEPA is an important milestone in bilateral economic relations between Indonesia and South Korea. IK-CEPA was signed on December 18, 2020 in Seoul, South Korea.

“IK-CEPA shows the commitment of the two countries to strengthen economic relations amid the challenging global economic situation in recent years,” said Minister Zulkifli Hasan.

Director General of Foreign Trade of the Ministry of Trade Budi Santoso said that South Korea is a very potential non-oil and gas export destination for Indonesia. “IK-CEPA will bring Indonesia’s economy to be stronger, more competitive, open, and more attractive to South Korean investors by making Indonesia a production hub to enter the regional and world markets,” Budi explained.

With this Permendag, Indonesia can optimize the use of market access for 95.5 percent of South Korean goods tariff posts with a market share of 97.33 percent.

“With the Certificate of Origin document stipulated in MOT 57 of 2022, business actors can benefit from the implementation of preferential tariffs to reduce production costs so as to increase industrial competitiveness and make Indonesian products more competitive through the use of preferences. Thus, Korean market opportunities can be further maximized,” Budi explained.

The implementation of the economic partnership agreement with the South Korean government will provide more benefits for Indonesia including expansion of market access and access to goods and services to South Korea, increasing gross domestic product (GDP) and competitiveness of Indonesian products, strengthening domestic industries, increasing investment flows to Indonesia, developing the quality of human resources (HR) to support Indonesia’s national economic recovery after the Covid-19 pandemic, and improving Indonesia’s trade balance.Budi hopes that business actors including small and medium enterprises (SMEs) can take advantage of this agreement to obtain preferential tariff facilities so that Indonesian products can be more competitive.

“This opportunity must be utilized by all Indonesian business players, including SMEs, to penetrate the South Korean market without import duties so that exports can increase,” Budi concluded.

The Indonesian government has ratified the IK-CEPA agreement on September 27, 2022 through Law Number 25 of 2022 on the Ratification of the Comprehensive Economic Partnership Agreement Between the Government of the Republic of Indonesia and the Government of the Republic of Korea.

Total trade between Indonesia and South Korea in the January-October 2022 period was recorded at USD 20.58 billion, an increase of 40.36 percent from the total trade value in the same period in the previous year which was recorded at USD 14.66 billion. In the January-October 2022 period, Indonesia’s exports and imports were recorded at USD 10.65 billion and USD 9.93 billion, thus providing a surplus for Indonesia of USD 712.3 million. (kemendag.go.id)

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