Signed by Korea-Indonesia CEPA… ‘Expectation’ to expand exports of plastic, steel, and metal parts

Minister of Trade, Industry and Energy Sung Yun-mo (right) and Indonesian Trade Minister Agus Suparmanto are taking commemorative photos after signing 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. 2020.12.18/News 1 © News1 Reporter Lee Kwang-ho

When the Korea-Indonesia Comprehensive Economic Partnership Agreement (CEPA) goes into effect, it is analyzed that Korean companies related to plastics, auto parts, and steel will benefit greatly.

According to the’Korea-Indonesia CEPA Signing Effect’ announced on the 3rd by the Institute for International Trade and Trade of the Korea International Trade Association, according to the Korea-Indonesia CEPA signed on December 18 last year, Indonesia is 92.1% of imported items, and in 2019, It was decided to abolish tariffs on items amounting to 93.5%.

This is an increase in market openness by 4.7 percentage points (p) based on import value and 11.9 percentage points based on number of items than the level of tariff elimination due to the existing ASEAN-Korea Free Trade Agreement (FTA).

By item, no tariffs will be applied to plastics, rubber products, and auto parts that are exported to Indonesia as soon as the Korea-Indonesia CEPA goes into effect, and companies in that industry are expected to benefit.

The report said, “As Indonesia’s population and income continue to grow, both the plastics and automobile markets are expected to grow stably. In the Indonesian market, which has a large potential with Korea-Indonesia CEPA, Korean companies are compared with major competitors such as China and Japan Securing competitiveness is an encouraging achievement.”

In addition, exports of steel products, cotton yarn and centrifugal pumps are also expected to increase due to additional tariff cuts. In particular, for steel products, the level of concessions was generally low in the existing ASEAN-Korea FTA, and a standard tax rate of up to 15% has been applied.When the Korea-Indonesia CEPA goes into effect, tariffs are gradually abolished from 7 years after the entry into force, and the effect of tariff cuts is significant. It is expected to see.

“Indonesia is the world’s fourth-largest population country with a population of 270 million and has a gross domestic product (GDP) of 1.1 trillion dollars, making it the largest economy in Southeast Asia.” -If the Indonesian CEPA goes into effect, immediate benefits are expected for Korean companies, and as the industry expects it to take effect in the second half of this year, the efforts of the Korean government and the Congress are necessary so that the agreement can take effect as soon as possible.”

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