Increase Export Value, Indonesia-Turkey Starts IT-CEPA Talks

INDUSTRY.co.id - Jakarta - Indonesia and Turkey formally initiated a trade negotiation or the Indonesia-Turkey Comprehensive Economic Partnership Agreement (IT-CEPA) earlier this year.

The Indonesian delegation was led by the Director General of International Trade Negotiations, the Ministry of Trade and the Chairman of the Indonesian Negotiator for IT-CEPA, Iman Pambagyo. Meanwhile, the Turkish Delegation was led by the Director-General for the EU Affairs, Ministry of Economy of Turkey, Murat Yapici.

Iman said that in the first round of talks, the two sides discussed the IT-CEPA Terms of Reference (ToR), and likened the perceptions of issues related to trade in goods, such as rules of origin (ROO), customs and trade facilitation, trade remedies, technical barriers to trade, sanitary and phytosanitary, and legal matters.

"The IT-CEPA negotiations will significantly increase Indonesia's export value to Turkey by eliminating trade barriers between the two countries, both tariff and non-tariff barriers," he said.

The negotiations are also expected to contribute to restoring Indonesia's export performance to Turkey, which in the period 2012-2016 dropped substantially.

"The main problems facing Indonesian products in the Turkish market are higher import duties and additional duties compared to our competitor countries which already have agreements with Turkey. It is expected that CEPA can improve the competitiveness of our products there, "said Iman.

The IT-CEPA negotiations will be conducted in a gradual (incremental) approach. The initial focus is the agreement on the trade of goods targeted to be completed and signed by the end of 2018.

This is done to accelerate implementation so that Indonesian exporters can immediately use IT-CEPA. At the next stage, negotiations are focused on trade in services, investments and other areas.

"Acceleration of the negotiation settlement with Turkey is very important to mitigate the decline in the value of Indonesian exports due to losing competitiveness with the products of neighboring countries," said Imman.

Total trade between Indonesia and Turkey in 2016 reached US $ 1.33 billion. Indonesia's exports amounted to US $ 1.02 billion and imports amounted to US $ 311.1 million, with a surplus for Indonesia of US $ 712.9 million. Turkey is the 28th non-oil export destination country and the country of origin of the 34th non-oil and gas imports for Indonesia in 2016.

The initiation of the IT-CEPA negotiations that took place in January 2018 was a follow-up to the signing of the Joint Ministerial Statement between Indonesian Trade Minister Enggartiasto Lukita; and Turkish Economy Minister Nihat Zeybekçi in Ankara, Turkey on July 6, 2017.

The signing was witnessed by Indonesian President, Joko Widodo and Turkish President, Recep Tayyip Erdogan. Both Heads of State mandated the negotiations to be completed as soon as possible. President Joko Widodo and President Erdogan also target the value of Indonesia-Turkey trade to US $ 10 billion by 2030.