JAKARTA/SEOUL (Reuters) – South Korea and Indonesia on Friday signed an economic partnership agreement aimed at boosting investment and trade between the two countries, in areas ranging from automobiles to apparel, officials said.
South Korea is among Indonesia’s top ten trading partners and investors, but the economic relationship still did not reflect the true potential, Indonesian Trade Minister Agus Suparmanto said at a signing ceremony broadcast online from Seoul.
Under the agreement, South Korea will eliminate more than 95% of its tariff lines and Indonesia eliminate over 92% and give preferential tariffs to support Korean investment, Indonesia’s trade ministry said in a statement.
The comprehensive economic partnership agreement (CEPA) will not only impact industries such as automobiles but also technology, South Korea’s Industry Minister Sung Yoon-mo said.
“This CEPA will also facilitate exchanges of professionals in area such as science, technology, software and robotics, promoting cooperation in high-tech industry,” Sung said.
In 2019, trade between the two countries was worth $15.65 billion and between 2015-2019 South Korean companies invested nearly $7 billion in Indonesia, Indonesian trade ministry data showed.
Indonesia aimed to start implementing the deal next year, Minister Agus said.
Indonesia has been trying to encourage foreign investors including South Korean companies to invest in plants and components for electric vehicles to take advantage of the country’s rich nickel ore reserves, which are used to make batteries.
South Korea’s Hyundai Motor Group and LG Chem Ltd are among South Korean companies reported to be considering investments in battery cell manufacturing in Indonesia.
(Reporting by Fransiska Nangoy in Jakarta and Heekyong Yang in Seoul; Editing by Ed Davies)
