Bali: Indonesia is setting its sights on doubling its trade with the United Arab Emirates (UAE) over the next three years as the Indonesia-UAE Comprehensive Economic Partnership Agreement (IUAE-CEPA) comes into effect. The trade pact, which was signed by both nations in July 2022, officially became operational on September 1, 2023.
The IUAE-CEPA represents a significant step forward in economic relations between Indonesia and the UAE. It primarily focuses on eliminating tariffs on a wide range of goods exchanged between the two countries while also covering areas such as services, investment, and intellectual property.
Husin Bagis, Indonesia's ambassador to the UAE, expressed optimism about the trade pact's impact, stating that it would "pave the way for stronger economic ties between Indonesia and the UAE." He further articulated the country's ambitious goal of doubling its trade volume with the UAE within the next three years.
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According to data from Indonesia's Trade Ministry, bilateral trade between the two nations reached $5 billion in 2022. The UAE holds the position of Indonesia's 13th largest trading partner and stands as the most significant market for Indonesian exports, particularly in the areas of palm oil and textiles.
The IUAE-CEPA is expected to foster growth in these sectors and facilitate trade expansion in diverse fields, including food, automotive, and tourism. Moreover, the agreement is anticipated to generate employment opportunities and create a favorable climate for investments in both countries.
Indonesia, with a population exceeding 270 million people, ranks as the world's fourth most populous nation and boasts the largest economy in Southeast Asia. In contrast, the UAE, with a population of over 9 million, may be small in terms of population, but it holds a prominent position as a major financial and trade hub in the Middle East.
Notably, the IUAE-CEPA represents a historic achievement as it marks the first free trade agreement between Indonesia and a Gulf country. Additionally, it is the UAE's first free trade agreement with a Southeast Asian nation. This agreement is emblematic of the growing economic ties between Indonesia and the UAE and aligns with the global trade agenda.
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The prospect of increased trade and cooperation between these two countries bodes well for their respective economies and signals their commitment to fostering international trade relationships. As the IUAE-CEPA begins to shape trade dynamics, the world will watch closely to observe the economic benefits and opportunities it unlocks for both Indonesia and the UAE.
