Indonesia, along with Brunei, Cambodia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, is a member of the Association of Southeast Asian Nations includes (ASEAN). Indonesia is the ASEAN country with the largest economy. It also has the most people (270 million in 2020) and accounts for almost one-third of the region’s GDP. As an autonomous market and one of the ASEAN members, Indonesia has signed and implemented some free trade agreements with nations and areas throughout the world, some of which are listed in this article.
ASEAN Free Trade Area
On the 28th of January, 1992, the ASEAN member states signed a trade deal that exempted more than 99 percent of traded goods from tariffs. In terms of the total value, Singapore and Malaysia topped the list in intra-ASEAN trade activity in 2015, with US $30.6 billion and US $ 16.1 billion, respectively.
Indonesia and The United States
Indonesia was the 33rd largest product export market for the United States in 2020. Soybeans, dairy products, wheat, cotton, meals, and fodders are among the US exports to Indonesia. The TIFA brings Indonesia and the US together to deal with bilateral, regional, and international concerns. Financial, travel, technical, and other services were estimated to be worth $1.9 billion in services exported from the U.S to Indonesia in the same year.
Indonesia and the European Union
The EU-Indonesia free trade talks began on July 18, 2016, and the deal went into force on May 1, 2014. The trade deal aims to maintain the EU-Indonesia Partnership and Cooperation Agreement, which is framed by the EU-Indonesia Partnership and Cooperation Agreement.
Indonesia and Pakistan – Preferential Trade Agreement (PTA).
Indonesia and Pakistan inked a preferential trade agreement in 2012, and it went into effect in 2013. Under the trade deal, the two countries agreed to give each other advantageous tariff rates on more than 200 products. In 2015, Indonesia and Pakistan’s annual trade volume was expected to be US $2.1 billion
Indonesia and Japan – Economic Partnership Agreement (EPA).
One of Indonesia’s most important trading partners is Japan. The EPA between Indonesia and Japan was signed on August 20, 2007, on the 20th day of the year. On July 1, 2008, the agreement went into effect. Approximately 92 percent of items exchanged between the two nations are currently subject to reduced tariffs. Japan and Indonesia had a total trade value of US $31.2 billion in 2015.
Comprehensive Economic Partnership between ASEAN and Japan
The ASEAN-Japan Comprehensive Economic Partnership, which went into effect in 2008, gives Indonesia access to another trade deal with Japan. The agreement covers tariff elimination, shared origin rules, and dispute resolution.
Comprehensive Economic Cooperation Agreement between ASEAN and the People’s Republic of China
Indonesia benefits from the ASEAN-China Comprehensive Economic Cooperation Agreement as one of the 10 ASEAN member states. The agreement’s first framework had been signed on the 4th of November, 2002, and it went into force on the 1st of January, 2010. China and the six founding members of ASEAN (Indonesia, Malaysia, Brunei Darussalam, the Philippines, Singapore, and Thailand) have agreed to lower import tariffs on more than 90% of traded goods.
Free Trade Agreement between ASEAN and Australia and New Zealand
The ASEAN-Australia-New Zealand Free Trade Agreement benefits Indonesia as well. The trade bloc went into force on January 1, 2010, with the following key goals: a gradual reduction in import tariffs up to zero within a set period, the elimination of trade barriers in services, and simple customs procedures. In 2015, Indonesia’s overall trade value with Australia and New Zealand was US $8.4 billion and US $1 billion, respectively.
Comprehensive Economic Cooperation Agreement between ASEAN and India
On the 13th of August, 2009, India and the ASEAN member states inked a trade deal. The agreement went into effect on January 1st, 2010. In 2015, India and Indonesia had a total trade value of $14.4 billion.
Comprehensive Economic Cooperation Agreement between ASEAN and Korea
Indonesia’s annual trade volume with South Korea was $16 billion in 2015. In 2007, a free trade agreement between South Korea and ASEAN member nations went into effect. Its goal is to revitalize trade by eliminating all tariff and non-tariff barriers.
Group of Eight Developing Countries Preferential Tariff Arrangement
In 2011, Indonesia signed a preferential pricing deal with Malaysia, Bangladesh, Pakistan, Iran, Egypt, Turkey, and Nigeria.
