Indonesia’s Minister of Trade, Zulkifli Hasan, and Peru’s Minister of Foreign Trade and Tourism, Juan Carlos Mathews Salazar, have officially initiated negotiations for the Indonesia-Peru Comprehensive Economic Partnership Agreement (IP-CEPA).
The launch of the negotiations was marked by the virtual signing of a ‘Joint Ministerial Statement on the Launch of the Negotiations towards a Comprehensive Economic Partnership Agreement between Indonesia and Peru.’ Zulkifli Hasan signed from Jakarta, Indonesia, while Juan Carlos Mathews Salazar signed from Lima, Peru.
The IP-CEPA negotiations signify the commitment of both countries to strengthening economic relations and trade cooperation. Zulkifli expressed hope that this agreement would bring significant benefits to the people of Indonesia and Peru, fostering sustainable economic growth in both Asia and South America.
Zulkifli Hasan emphasized that the launch of IP-CEPA negotiations underscores the Indonesian Ministry of Trade’s dedication to tapping into non-traditional export markets, particularly in South America, as directed by President Joko Widodo. He emphasized that the trade agreement with Peru would expand market access for Indonesian products in South America, stimulate new investment opportunities and job creation, and offer advantages to small and medium-sized enterprises (SMEs).
The World Bank predicts that Peru will become the second-fastest-growing and stable economy in South America in 2023.
Juan Carlos Mathews Salazar, Peru’s Minister of Foreign Trade and Tourism, noted that the IP-CEPA demonstrates an enhanced commitment to cooperation between Indonesia and Peru. He expressed optimism that the agreement would enhance market access for the flagship products of both countries.
Opening up to non-traditional markets
The Director-General of International Trade Negotiations at the Indonesian Ministry of Trade, Djatmiko Bris Witjaksono, added that the IP-CEPA highlights Indonesia’s commitment to opening up non-traditional markets with robust economic profiles in South America. He expressed hope that the Indonesia-Peru CEPA trade agreement would replicate the success of the Indonesia-Chile CEPA in boosting trade value between the two nations, especially Indonesian exports to Chile.
The Indonesia-Peru CEPA negotiations will proceed incrementally, beginning with discussions on the trade of goods, followed by services, investment, and various other areas of cooperation.
Zulkifli Hasan and Minister Juan Carlos are confident that the IP-CEPA agreement will lay the foundation for closer economic collaboration between Indonesia and Peru. They believe that IP-CEPA will serve as a magnet for investment and business opportunities for entrepreneurs.
Both Indonesia and Peru aim to hold the first round of negotiations by the end of 2023. They also hope that their negotiating teams can conclude discussions on the trade of goods within a year.
Trade between Indonesia and Peru
From January to May 2023, the total trade between Indonesia and Peru amounted to US$191.8 million, with Indonesian exports to Peru reaching US$158.4 million and imports from Peru to Indonesia totaling US$33.3 million, resulting in a surplus of US$125.1 million for Indonesia. Over the past five years (2018–2022), Indonesia has consistently maintained a trade surplus with Peru, with a growth trend of 21.8 percent.
In 2022, the overall trade between Indonesia and Peru reached USD 554.5 million. Indonesian exports to Peru amounted to USD 442.7 million, while imports from Peru to Indonesia were valued at USD 111.8 million, resulting in an Indonesian surplus of USD 330.9 million.
Key Indonesian exports to Peru include motor vehicles, footwear, mineral fertilizers, biodiesel and derivatives, and tissues. On the other hand, primary commodities imported from Peru to Indonesia include cocoa beans, mineral fertilizers, coal, grapes, and vegetable extracts.
