Korea paving way for bilateral free trade deal with Indonesia

Korea and Indonesia will hold their second round of free trade talks next week as part of an effort to further boost bilateral trade volume, Seoul’s Ministry of Foreign Affairs and Trade said yesterday.

During the two-day meeting that will start Monday in Jakarta, negotiators will discuss guidelines for talks and other details, according to the ministry.

In March, President Lee Myung-bak and his Indonesian counterpart Susilo Bambang Yudhoyono announced the launch of talks concerning a so-called comprehensive economic partnership agreement (CEPA), which is equivalent to a free trade agreement.

In 2011, Korea and Indonesia held three rounds of preliminary talks under an agreement to conduct a joint study into the possibility of a bilateral free trade pact.

Indonesia is Korea’s eighth-largest trading partner with bilateral trade reaching $30.7 billion last year. Korea’s shipments to Indonesia increased 52.4 percent on-year to $13.56 billion in 2011, with imports from Southeast Asian countries gaining 23.1 percent to $17.21 billion, according to government data.

Korea has a free trade agreement with the 10-member Association of Southeast Asian Nations (Asean) that includes Indonesia. The country has also been seeking bilateral pacts with some Asean members to further boost trade within the region.

Indonesia is the most populous Asean member and has rich natural resources.

Korea, a resource-scarce nation that relies mainly on exports for economic growth, has been aggressively seeking free trade accords with foreign countries to expand what Lee calls the country’s “economic territory.”

Yonhap