Last December, Korea and Indonesia CEPA final signature
“Plastic rubber auto parts industry, no tariffs immediately upon announcement”
Minister of Trade, Industry and Energy Sung Yun-mo (right) and Indonesian Trade Minister Agus Suparmanto signed the agreement and the implementation agreement at the signing ceremony of the Korea-Indonesia Comprehensive Economic Partnership Agreement (CEPA) held at Lotte Hotel in Jung-gu, Seoul on the morning of December 18 last year. Photo = News 1
With the final signing of the Comprehensive Economic Partnership Agreement (CEPA) between Korea and Indonesia at the end of last year, it is about to take effect, an analysis said that plastic, auto parts, and steel companies are expected to benefit.
According to the report on the’Effect of Korea-Indonesia CEPA Signing’ released by the Korea International Trade Association (KITA) on the 3rd, with CEPA between the two countries, Indonesia abolished tariffs on items that amounted to 92.1% of imported items and 93.5% of imported items in 2019. I decided to do it.
This is an increase in market opening by 4.7 percentage points in terms of import value and 11.9 percentage points in terms of number of items than the level of tariff abolition under the existing ASEAN-Korea Free Trade Agreement (FTA).
By item, the plastics and rubber products and auto parts industries, which export a lot to Indonesia, are expected to benefit from tariff-free application as soon as they take effect.
The report said, “As Indonesia’s population and income continue to grow, stable growth of the plastic car market is expected.”
Indonesia is ASEAN’s largest market with a gross domestic product of 1.1 trillion dollars, and the world’s fourth largest population with a population of 270 million.
Steel products, cotton yarn and centrifugal pumps are also expected to increase in exports due to additional tariff cuts. In particular, for steel products, a standard tax rate of up to 15% was applied in the existing ASEAN-Korea FTA, but when CEPA enters into force, tariffs will be phased out 7 years after the entry into force.
Korea will phase out tariffs on bunker C oil, fine chemical raw materials, raw sugar, and beer. The level of opening of the online game, distribution, and construction service markets is also expected to increase.
Currently, the government is working to make the agreement go into effect early, such as requesting the National Assembly for ratification after the final signing of the CEPA.
Reporter Chae Sun-hee [email protected]
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