Khaleej Times, Saturday, Jul 02, 2022 | Zul Hijjah 3, 1443
UAE-Indonesia to increase annual bilateral trade to $10 billion
Emirates: The UAE signed its third
Comprehensive Economic Partnership Agreement (CEPA) with the Republic of
Indonesia on July 1. Following the partnership agreements with India and Israel,
the CEPA with Indonesia is designed to increase annual bilateral trade to $10
billion within five years, state news agency WAM reported.
The agreement removes trade barriers on a wide range of goods and services,
creating new opportunities for UAE exporters.
UAE President His Highness Sheikh Mohamed bin Zayed Al Nahyan witnessed the
signing of the UAE-Indonesia CEPA alongside his Indonesian counterpart President
Joko Widodo in Abu Dhabi on Friday.
The agreement was signed at the Al Shati Palace in Abu Dhabi by Abdullah bin
Touq Al Marri, Minister of Economy, and Zulkifli Hasan, Minister of Trade of
Indonesia.
Sheikh Mohamed said, “Indonesia is one of our closest strategic allies. Our
nations have worked together in the spirit of cooperation and unity for decades
to promote social and economic development and unlock opportunities for our
people.”
He added, “It is worth noting that Indonesia was the first nation with whom we
began CEPA negotiations, and we very much welcome the new, more prosperous
chapter in our partnership that promises to deliver.”
The UAE and Indonesia launched CEPA negotiations in September 2021 under a
shared vision to expand economic opportunities, drive the post-Covid recovery
and mark a new phase of strategic cooperation.
"Not only is it my hope that this agreement creates a new platform for
cooperation, investment and knowledge transfer, but it also offers us new tools
to navigate future challenges and opportunities together. Like all our new trade
deals, this is part of a dynamic plan to build a network of trade alliances with
some of the world’s fastest-growing economies. This will set us on the path to
prosperity outlined in our Projects of the 50 initiative that aims to make the
UAE a truly global business hub,” he stated.
President Widodo stressed that the agreement reflects an ambitious leap in
cooperation between the two countries. He also expressed his happiness with this
crucial economic agreement, which is expected to help double the value of
bilateral trade in the coming years.
Terms of the trade deal
Under the far-reaching trade deal, over 80 per cent of UAE exports will gain
immediate duty-free access to Indonesia. The agreement also can potentially
increase the total value of trade in services between the UAE and Indonesia to
$630 million by 2030.
Streamlined customs procedures and an emphasis on digital trade will make it
easier for UAE companies to do business with Indonesia, which is set to grow 5.4
per cent in 2022.
The CEPA will lead to increased development and new opportunities for the
growing Islamic economy, estimated to be worth $3.2 trillion by 2024. It will
also accelerate more than $10 billion of investment projects in priority sectors
such as agriculture, energy and infrastructure, particularly logistics while
encouraging future cooperation in tourism, entrepreneurship and healthcare.
Dr Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, affirmed
that the UAE-Indonesia CEPA would reduce and cancel tariffs on 99 per cent of
traded goods and streamline relevant procedures and laws to help boost trade
exchanges between the two nations.
Dr Al Zeyoudi said that, by 2030, the CEPA is expected to contribute around $4.6
billion to the GDP and create around 50,000 high-skilled jobs.
He added that the UAE-Indonesia CEPA includes cooperation in various sectors,
including halal food, Islamic fashion, pharmaceuticals, and other
Sharia-compliant sectors.
Moreover, the Small and Medium Enterprises (SMEs) in the agriculture sector and
many industries that use petrochemicals, which employ a large number of people,
will be the immediate beneficiaries of this CEPA, said Husin Bagis, the
Indonesian ambassador to the UAE.
“Increased business and new opportunities for SMEs will translate into economic
prosperity for their employees and open up new job prospects,” he said.
Of the total imports from the UAE to Indonesia, 70 per cent constitute oil and
gas. Of the remaining 30 per cent, a huge chunk is petrochemicals, the main
ingredient of plastic products. Other imports are dates, steel and aluminium
etc., Bagis stated.
Key facets of the UAE- Indonesia CEPA
Rapid technological progress in emerging sectors such as clean and renewable
technology, cloud computing and automation will be pursued
The deal will
unlock the potential of the south-south corridor and accelerate the shift
towards a new global economic centre – the new Asian future
Deep business, cultural and diplomatic ties have anchored the mutually
beneficial UAE-Indonesia partnership, with non-oil bilateral trade standing
at US$3 billion in 2021, up 62 per cent from 2020 and 17 per cent from 2019
Both countries have continued to explore
closer collaboration by working together on a wide range of strategic
projects, including the world’s biggest floating solar power plant
The UAE has pledged US$10 billion to the new Indonesia Investment
Authority, while the Indonesian government became the largest Sukuk issuer
on Nasdaq Dubai in May 2019
Signing of Memorandums of Understanding (MoU) and protocols
An MoU between the Ministry of Health and
Prevention (MOHAP) and Indonesia’s National Agency of Drug and Food Control
to enhance their cooperation in drug and vaccine monitoring. The MoU was
signed by Abdul Rahman bin Mohammad Al Owais, Minister of Health and
Prevention, and Retno Marsudi, Minister of Foreign AffairsImplementation
of a joint project aimed at growing mangroves between the Ministry of
Climate Change and Environment and the Coordinating Ministry for Maritime
and Investment Affairs of Indonesia, which was signed by Mariam bint
Mohammed Saeed Hareb Almheiri, Minister of Climate Change and the
Environment; and Retno Marsudi, Minister of Foreign Affairs
A cooperation protocol between the Ministry of Defence and its Indonesian
counterpart, signed by Mohammed bin Ahmed Al Bowardi, Minister of State for
Defence Affairs; and Prabowo Subianto, Minister of Defence of Indonesia.
An MoU between the Mohamed bin Zayed University for Humanities and the
Nahdlatul Ulama University of Yogyakarta signed by Dr Hamdan Musallam Al
Mazrouei, advisor at the Abu Dhabi Crown Prince's Court; and Yahya Cholil
Staquf, chairman of the Nahdlatul Ulama Association
A contract for the purchase of a landing platform between the Tawazun
Economic Council and Indonesian company ‘SOE,’ which was signed by Tareq
Abdul Raheem Al Hosani, CEO of Tawazun; and Kaharuddin Djeno, CEO of PT PAL.