Brunei Darussalam (ANTARA) - Indonesian Trade Minister Zulkifli Hasan and Peruvian Foreign Trade and Tourism Minister Juan Carlos Mathews Salazar launched negotiations on the Indonesia-Peru Comprehensive Economic Partnership Agreement (IP-CEPA) on Tuesday.

"We hope that this agreement will significantly benefit both the people of Indonesia and Peru as well as encourage sustainable economic growth in the Asian and South American regions," Hasan said in a written statement received in Brunei Darussalam on Tuesday.

The two ministers virtually signed the script of the Joint Ministerial Statement on the Launch of the Negotiations towards a Comprehensive Economic Partnership Agreement between Indonesia and Peru, marking the commencement of negotiations.

Minister Hasan said that the negotiations on IP-CEPA finalization would serve as a pivotal foundation for both countries to strengthen their economic and trade relations.

The launch of IP-CEPA negotiations has demonstrated the resolve of the Trade Ministry to tap into the potential of non-traditional export markets, including those in Latin America, in accordance with the instruction of President Joko Widodo, he added.

"A trade agreement with Peru will expand Indonesian products' access to markets in the South American region, open new investment opportunities, create more job vacancies, and provide benefits to small and medium enterprises," he said.

It should be noted that according to the World Bank, in 2023, Peru will emerge as the country with the second-highest and most stable rate of economic growth rate in the South American region.

According to Minister Salazar, IP-CEPA would make it clear that Indonesia and Peru are committed to bolstering their cooperation. The agreement is expected to allow featured products from the two countries to access each other's markets, he added.

"This agreement will become a milestone in the economic ties between Indonesia and Peru," he affirmed.

Both ministers also expressed optimism that, by realizing the agreement, Indonesia and Peru will be able to further tighten their countries' economic relations, draw more investment, and create new business opportunities.

On the same occasion, Djatmiko Bris Witjaksono, director general of international trade negotiations at the ministry, said he expects the IP-CEPA negotiations to result in a similar success as was yielded by Indonesia's agreement with Chile.

"We hope that the Indonesia-Peru CEPA will follow in the success of Indonesia-CEPA, which has been successful in increasing the trade value between the two countries, especially Indonesia's exports to Chile," he added.

The negotiations on IP-CEPA will be carried out incrementally through discussions on several matters, such as trade in goods, trade in services, investment, and other fields of cooperation.

Indonesia and Peru have agreed to hold the first round of negotiations at the end of the year. Both parties have expressed the hope that their negotiating teams will complete the discussion on trade in goods within one year.

The value of the trade between Indonesia and Peru was recorded at US$191.8 million during the January–May 2023 period, with Indonesia's exports to Peru reaching US$158.4 million and imports recorded at US$33.3 million.

During the 2018–2022 period, Indonesia recorded a surplus of US$125.1 million, or a constant 21.8-percent surplus rate, in its trade with Peru.

The two countries recorded a total trade value of US$554.5 million in 2022, with Indonesia's exports to and imports from Peru pegged at US$442.7 million and US$111.8 million, respectively.

The same year, Indonesia's trade with Peru reached a surplus of US$330.9 million.

Indonesia mainly exports motorized vehicles, footwear, mineral fertilizers, biodiesel and its derivative products, as well as tissue to Peru. Meanwhile, Peruvian products exported to Indonesia have been dominated by cocoa beans, mineral fertilizers, coal, grapes, and vegetable extracts.

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Translator: Maria C, Tegar Nurfitra
Editor: Azis Kurmala
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