The Coordinating Minister for Economic Affairs of Indonesia, Airlangga Hartarto, and the Minister of International Trade of Canada, Mary Ng, have agreed to finalize the Indonesia-Canada Comprehensive Economic Agreement (ICA-CEPA) by 2024.
Both ministers share a common vision in completing the ICA-CEPA, recognizing the strategically complementary nature of the bilateral economic relationship between Indonesia and Canada.
Indonesia and Canada are producers and processors of various key commodities, and cooperation between the two nations can enhance economic value in each respective country.
“The trade missions of both countries will actively contribute to the enhancement of the economic relationship between the two nations,” he stated, on August 20, 2023.
The realization of ICA-CEPA is expected to increase Indonesia’s Gross Domestic Product (GDP) by up to US$1.4 billion, and Indonesian exports to Canada are projected to increase by around US$ 851 million in the medium term.
Furthermore, in May-June 2023, Indonesia and Canada completed the fifth round of negotiations for ICA-CEPA. During the meeting held in the United States, there were several substantive advancements in discussions about trade in goods, services, and investment.
Collaboration in the critical mineral sector
In the fifth round of ICA-CEPA negotiations, Canada expressed interest in collaborating with Indonesia in the critical minerals sector. Airlangga also emphasized that this cooperation was an important issue.
“Collaboration on critical minerals is an essential matter that is expected to be promptly discussed within the Indo-Pacific Economic Framework (IPEF). Following the agreement on Pillar 2 of IPEF, all IPEF partner countries are currently focusing on concluding discussions on Pillars 3 and 4, as well as some issues in Pillar 1,” Airlangga concluded.
As a trading partner, Canada holds significant importance for Indonesia, with the trade value between the two countries reaching US$ 4.3 billion in 2022, marking a 37.14% increase from the previous year.
From an investment perspective, Canada ranks 15th with an investment value of US$ 964 million during the 2018-2022 period.
Minister Mary Ng reaffirmed Canada’s commitment to bilateral and regional economic development with the release of the Canada Indo-Pacific Strategy (IPS) in November 2022.
In the IPS, Canada aims to enhance trade relations both bilaterally and within the region, including through negotiations for the Indonesia-Canada Comprehensive Economic Agreement (ICA-CEPA) and the ongoing negotiations within the Indo-Pacific Economic Framework for Prosperity (IPEF).
“Various business delegation visits from both Canada and Indonesia are expected to further strengthen the trade and investment relationship between the two countries,” stated Mary Ng.
Additionally, Canada also hopes for open trade and a competitive market within the framework of a free trade agreement (FTA).
