Indonesia is hoping to boost commerce with the UAE more than two-fold in the next three years, Jakarta’s envoy to Abu Dhabi said on Monday as a free trade pact between the two countries went into effect at the beginning of this month.
The Indonesia-UAE Comprehensive Economic Partnership Agreement went into force on Sept. 1 after the two countries signed the pact in July last year, making it Jakarta’s first with a Gulf country and Abu Dhabi’s first with a Southeast Asian nation.
Bilateral trade volume reached around $5 billion in 2022, according to Indonesian Trade Ministry Data, showcasing an increase of around 20 percent from the previous year, when it was worth $4 billion.
“It will indeed lead to a stronger bilateral economic relationship between two countries,” Husin Bagis, Indonesia’s ambassador to the UAE, told Arab News. “Through IUAE-CEPA, I hope within three years, the total trade of both countries could reach more than $10 billion and the investment could reach $10 billion as well.
“With the reduction of tariff or zero tariffs, Indonesia could strengthen exports. I believe once exports increase, it will attract more investment,” he added.
The pact erases about 99 percent of existing tariffs and includes commitments to increase Indonesia’s services exports to the UAE by 6 percent and mutually recognize each country’s halal certification.
Bagis said the pact could potentially open more doors for Jakarta to reach other countries in the region.
“The UAE is a hub for Indonesia, as it is an entrance to countries in the Middle East, Africa and Europe, hence it will be an advantage for Indonesia to have CEPA with the UAE,” he said.
Indonesia’s Trade Minister Zulkifli Hasan said the two countries must quickly resolve technical issues to ensure smooth implementation of their trade pact during a meeting with the UAE’s minister of state for foreign trade in Jakarta on Sunday.
“Indonesia is suggesting to the UAE to hold a Joint Committee Meeting at the level of senior officials and special committees of both nations to resolve technical issues in order to make sure that the agreement can be implemented smoothly,” Hasan said in a statement.
Indonesia’s trade with the UAE reached over $2.2 billion as of June this year, with Hasan pushing for more cooperation between their private sectors, including through bilateral forums or business roadshows.
“I have suggested the involvement of Indonesia-UAE business councils to further boost trade cooperation between the two countries,” he said.
“I am optimistic that trade between Indonesia and UAE will increase further.”