The Indonesian government, through its Ministry of Trade, recently concluded the first round of discussions for the Indonesia-Canada Comprehensive Economic Partnership Agreement (ICA-CEPA) in Bandung, West Java. This move marks a strategic effort on Indonesia’s part to broaden its product exports into the vast North American market.
Djatmiko Bris Witjaksono, the Director-General of International Trade Negotiations at the Ministry of Trade, emphasized that these discussions reflect the commitment of both nations to enhance business and investment opportunities collectively. “Our goal is to wrap up the ICA-CEPA talks by the end of 2023. Thus, we’re urging negotiators from both countries to quickly organize a follow-up meeting before the next round of discussions,” he announced in a statement on Sunday, March 20.
As it stands, Indonesia has a single trade agreement on the American continent, with Chile in South America, making these negotiations pivotal for Indonesia’s entry into other North American markets, including the United States and Mexico. Since Canada has existing trade agreements with these countries, the ICA-CEPA could serve as a gateway for Indonesian exports to those regions.
This negotiation also aims to expand access to goods markets, boost Indonesia’s service exports, attract foreign investments, and foster cooperation in key sectors like Micro, Small, and Medium Enterprises (MSMEs).
In 2021, the trade volume between Indonesia and Canada recorded a significant $3.1 billion. Of this, Indonesian exports to Canada accounted for $1.1 billion, supporting a balance where imports from Canada were valued at $2 billion.
Indonesia’s chief export commodities to Canada in 2021 included natural rubber, jerseys, motor vehicle parts, tires, and footwear from textiles. On the flip side, Indonesia’s primary imports from Canada comprised wheat, fertilizers, pulp, soybeans, and iron ore, highlighting a diverse trade relationship that spans various essential sectors.
This partnership not only reflects the growing economic ties between Indonesia and Canada but also underscores the importance of strategic trade agreements in accessing new markets and fostering cross-border economic growth.
