In order to strengthen the economy, The Indonesian-South Korean Comprehensive Economic Partnership Agreement (IK-CEPA) was signed in Seoul by Indonesian Trade Minister Agus Suparmanto and South Korean Trade, Industry, and Energy Minister Sung Yun-mo.
The partnership happened during the COVID-19 pandemic only shows the willingness of both nations to jointly forge trade ties in the light of the global economic situation, which has been full of challenges in recent years..
In this sense, the IK-CEPA is expected to help accelerate the economic recovery of both nations. South Korea will abolish 95.54 percent of its tariff posts while selling commodities, while Indonesia will eliminate 92.06 percent of its tariff posts.
Consequently, South Korea will abolish tariffs on a range of Indonesian goods, including lubricant raw materials, stearic acid, t-shirts, blockboards, dried fruits and seaweed, while Indonesia will abolish tariffs on South Korean products, including car gearboxes, ball bearings and unglazed paving, fireplaces or wall tiles.
For this reason, Indonesia will also have tariff priority under the deal to encourage South Korean investment in Indonesia by up to 0.96 percent of the US$254.49 million tariff bill, or 2.96 percent of Indonesia’s overall imports from South Korea.
On the other hand, South Korea will remove tariffs for 97.3 percent of its imports from Indonesia with respect to its import volume, while Indonesia will eliminate tariffs for 94 percent of its imports from South Korea.
It’s undeniable that both countries are committed to opening up more than 100 sub-sectors of trade in services and the the incorporation of a range of potential service markets, including the construction, postal and courier, franchise and computer-related services sectors, as well as promoting intra-corporate transferees, business visitors and independent practitioners.