News Focus - Indonesia, Czech need CEPA to foster economic ties

News Focus - Indonesia, Czech need CEPA to foster economic ties

Industry Minister Airlangga Hartarto (right) talked to Czech Senate Chairman Milan Stech (center) after holding a meeting at the Ministry of Industry office in Jakarta (ANTARA News/ Industry Ministry's Public Relations Bureau)

Jakarta (ANTARA News) - Indonesia and the Czech Republic need to establish a Comprehensive Economic Partnership Agreement (CEPA) to further boost economic ties between the two countries.

Although the Czech Republic is a member of the European Union, which already has such a scheme, namely the Indonesia-European Union Comprehensive Economic Partnership Agreement (I-EU CEPA), yet bilaterally, CEPA with the Czech is not less important.

The agreement is expected to boost trade growth between Indonesia and the European countries, considering that EU is a strategic trading partner for Indonesia, with total trade between the two sodes in 2017 amounting to US$29 billion.

The sixth round of the Indonesia-European Union Comprehensive Economic Partnership Agreement (I-EU CEPA) negotiations will be held in Indonesia in October 2018.

This week, a Czech Senate delegation is on a visit to Indonesia. It brought along representatives from the Czech Chamber of Commerce, including its Deputy Chair, Michael Steffi.

The Czech delegation is expected to also support the acceleration of the implementation of the I-EU CEPA.

More importantly, however, Indonesia needs to establish a bilateral CEPA with the Czech Republic to further boost their economic cooperation.

The bilateral trade volume between Indonesia and the Czech Republic reached $260 million, with a deficit on Indonesia`s side.

After all, House of Consultative Assembly (MPR) Chairman Zulkifli Hasan hoped that bilateral ties between Indonesia and the Czech Republic should be strengthened in various fields that would benefit both sides.

The MPR speaker made the remarks after receiving Czech Senate Chief Milan Stech in a written statement made available to Antara on Monday. Stech, along with dozens of other delegation members, was received by the MPR Leaders in the Delegation Room, Nusantara V, of the Parliament Building, Jakarta.

Hence, through a bilateral CEPA, Indonesia and the Czech Republic could explore more opportunities for cooperation to increase investment and exports, as well as to strengthen and improve the national manufacturing structure and trade balance.

Industry Minister Airlangga Hartarto believes that if the comprehensive bilateral partnership framework is established, it will significantly increase exports of Indonesian products to the Czech Republic.

"Some of our manufacturing products have the potential to penetrate the Czech market, including textiles and clothing, footwear, wood-based furniture, as well as pulp and paper," he stated.

According to Airlangga Hartarto, the ministry is attempting to attract Czech investors to invest in Indonesia in the rubber processing industry sector. This is in line with Indonesia`s potential that is included in the world`s largest crumb rubber producers.

President Joko Widodo (Jokowi) has also expressed Indonesia`s commitment to continue to improve cooperation in the fields of trade and industry with the Czech Republic.

"I am committed to continuing to advance cooperation with the Czech Republic in various areas, especially in the fields of trade and industry," President Jokowi remarked while receiving a Czech Republic Senate delegation at the Merdeka Palace in Jakarta on Monday (Sept 17).

President Jokowi remarked that the Czech Republic is an old friend of Indonesia. Czech was one of the countries in Europe that had first recognized Indonesian independence.

"On this occasion, we would like to thank you for the Czech Republic`s support for Indonesia to become a non-permanent member of the UN Security Council for 2019-2020," Jokowi noted.

Indonesia also seeks support from the Czech Republic to help eliminate the possibility of discrimination against its palm oil products in the European market.

"The message conveyed was a request for support for Indonesian palm oil products, because this issue is related to 17 million Indonesian farmers who earn a living from palm oil industry," Deputy Foreign Minister AM Fachir, who accompanied the president during the meeting, told the press.

Responding to such request, the Czech Republic Senate delegation, comprising Chair of the Czech Republic Senate Milan Stech, Senator Tomas Grulich, Senator Ludek Jenista, Senator Hassan Mezian, Senator Lumir Kantor, and Senator Radko Martinek, said they do not have any problem related to Indonesian palm oil products.

"They also conveyed the opportunity for cooperation in the automotive field, and the President openly said that Indonesia would want to work together in automotive development or (in the fields that are) leading to industry 4.0," Fachir noted.

According to Minister Airlangga, the Czech Republic has a rubber processing industry that is quite competitive, such as tire factories. Indonesia has a railroad industry that has been able to produce various components and railway infrastructure, for instance, rolling stock, rail tracks, and signaling systems.

This has become a collaborative opportunity for both countries for technology transfer.

"Indonesia can be used as the basis for the development of a railroad industry. Several countries, including Australia, Bangladesh, the Philippines, Malaysia, Thailand, and Sri Lanka, have ordered and imported trains from Indonesia," he explained.

(T.A014/A/KR-BSR/A014) 18-09-2018 22:50:30

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