"Panama is a gateway to the South American market for Indonesian commodities," Retno said after the meeting with Isabel at the Foreign Affairs Ministry here on Thursday.
She said, more than 60 percent of Indonesian export to South American market make their way via Panama.
"Therefore, we agree to seek expansion of bilateral cooperation mainly in economy," she said.
Trade between Indonesia and Panama was valued at US$130 million in 2017. The trade in the first half of 2018 was 31.2 percent higher than in the same period of last year.
"The possibility of expanding the economic cooperation between the two countries is highly potential and wide open," she said.
The Panamanian Foreign Minister and her entourage visited the Trade Expo Indonesia at the Bumi Serpong Damai (BSD), Tangerang, Banten.
At the meeting the two foreign ministers also discussed ways of promoting cooperation in the maritime sector including in marine sector, port management and in exclusive economic zone management.
The Panamanian delegation would attend the Our Ocean Conference 2018 to take place in Nusa Dua, Bali in October 29-30, 2018.
Indonesia and Panama have fostered diplomatic relations since 1979.
Reporting by Yuni Arisandy
Editing by A Saragih