[Indonesia Report] South Korea, Indonesia to talk about FTA

Presiden Lee Myung-bak, right, shakes hand with his Indonesian counterpart Susilo Bambang Yudhoyono in their meeting in Seoul last March. (Photo : AP/Firdia Lisnawati)

South Korean and Indonesian negotiators are scheduled to hold the first meeting of free trade talks Thursday (July 12) in the Indonesia’s capital city of Jakarta. According to South Korea’s Trade Ministry, the agenda of the meeting is to discuss the scope and coverage of the pact, as well as other issues, Yonhap, Korean News Agency reported on Wednesday.

Indonesian media, Tempo, reported that the meeting between the two countries negotiators according to Indonesian’s General Director of International Trade of Trade Ministry, Iman Pambagyo, is to determine the Term of Reference of the Free Trade talks between Indonesia and South Korea.

“This meeting would not bound legally but is necessary for the two countries to lead to a substantive negotiation.” Pambagyo said.

Indonesia’s General Directorate of International Trade of Trade Ministry released report of the Joint Study Group for a Comprehensive Economic Partnership Agreement of Korea and Indonesia, saying that the Computable General Equilibrium
Simulation concluded that through Indonesia-Korea CEPA, Indonesia’s welfare would reach US$10,6 billion with increase of GDP of 4.37 percent. As for Korea, it would increase its welfare to US$1,5 billion and 0.13 percent of GDP.

Today’s meeting is also the first free trade talks between Indonesia and South Korea after President Lee Myung Bak and President Susilo Bambang Yudhoyono’s meeting in Seoul, last March. On the meeting, the two leaders targeted Indonesia – Korea’s trade volume in 2015 to reach US$50 billion and US$100 billion in 2020.

Since early last year, South Korea – Indonesia Free Trade Agreement talks has been in the two countries interests. And In May 2011, ROK and Indonesia agreed to launch joint study for the Korea – Indonesia Comprehensive Economic Partnership Agreement.

 Previously, both countries have held three rounds of meeting on the joint study for the ROK – Indonesia CEPA. This FTA talks also was raised on the occasion of the Korea-Indonesia Summit Meeting in Bali, Indonesia, last year. In November 2011, Korea held Public Hearing on the Korea-Indonesia CEPA.
 
 In 2011, South Korea and Indonesia’s bilateral trade was in total of US$ 30,8 billion. According to Korea’s Ministry of Foreign Affairs and Trade, last year Korea received investment orders of US$9,9 billion and construction orders of $2,2 billion from a total of 8 projects from Indonesia.

Meidyana Rayana Intern Reporter news@theasian.asia