Jakarta and Seoul link up amid ‘turbulent’ economic pressures

JAKARTA: Indonesian President Joko “Jokowi” Widodo’s aggressive efforts to lure more foreign direct investment ahead of his second term in office has been warmly met by South Korea, which also sees the need to expand its trade amid “turbulent” economic circumstances in the wider region.

South Korea and Indonesia are ambitiously aiming to conclude talks on the IndonesiaKorea Comprehensive Economic Partnership Agreement (IK-CEPA) before the start of Jokowi’s second term on Oct 20, with a view to announcing the deal at a regional summit in November.

Trade Minister Enggartiasto Lukita announced last week the proposal to wrap up trade talks as soon as October, when he meets South Korean counterpart Sung Yun-mo on the margins of the upcoming Trade Expo Indonesia.

“Our tentative deadline is to complete in principle the general negotiations on goods and services by Oct 16,” South Korean ambassador to Indonesia Kim Chang-beom announced at the Indonesia-Korea Conference in Jakarta on Wednesday.

“Hopefully, this trade ministerial meeting will be the watershed (moment leading up) to the official announcement of the conclusion of the CEPA negotiations when President Jokowi visits Busan in November.”

Together with other Asean leaders, Jokowi is expected to attend the Asean-South Korea Commemorative Summit in Busan from Nov 25 to 26.

The event is being held to celebrate the 30th anniversary of the Asean-South Korea dialogue partnership.

The envoy said the CEPA would pave the way for business communities from both countries to gain a much more positive outlook of one another, as Seoul and Jakarta both faced what he called “a very turbulent environment outside, especially in the trading system”.

The IK-CEPA was first initiated in 2012 but came to a halt after just two years of talks.

The two sides announced in February that they would relaunch negotiations.

Industry Minister Airlangga Hartanto said the trade deal would certainly facilitate closer value chain links, especially in the manufacturing sector.

Jokowi visited Seoul and met South Korean President Moon Jae-in in September last year, where they pledged to increase bilateral trade to US$30mil (RM125.4mil) by 2020.