Indonesia is expected to sign a trade agreement with the Islamic Republic of Iran as early as this week, according to a statement issued by the Indonesian Trade Ministry. The announcement comes at the end of a seven-round negotiation process, which has now been successfully concluded. The signing of the agreement, by the Iran Preferential Trade Agreement (II-PTA), will be the final stage of the negotiation process.
“Iran is a very potential non-traditional trading partner for Indonesia. With this PTA, we hope that export opportunities for Indonesia’s superior and potential products will increase and reach a wider market, especially in the Middle East and Persia,” said Johny Martha, Director of Bilateral Negotiations at the Indonesian Ministry of Trade.
The agreement will take place during Iranian President Ibrahim Raisy’s visit to Jakarta on May 22-24, 2023.
Martha praised both countries for the successful negotiations. “With intensive communication and good cooperation, the pending issues have been successfully resolved. Both sides have shown mutual flexibility and a strong commitment to immediately finalize the discussion of several articles in the II-PTA that could not be agreed upon at the previous meeting,” she added.
According to the Ministry’s statistics, the total trade between Indonesia and Iran until March 2023 reached USD 54.1 million, while the total trade between the two countries in 2022 amounted to USD 257.2 million.
Indonesia mainly exports peanuts, motorcycles, industrial monocarboxylic fatty acids, wood fibers, and vehicle parts to Iran. Meanwhile, Iran’s main imports are dates, hydrocarbons (such as oil and gas), vegetable alkaloids, instruments, machines and models for demonstration purposes, and wine.
Indonesia is currently the 15th largest economy in the world, with a GDP of USD1.23 trillion and an annual growth rate of 5.7%. Experts predict Indonesia could become the world’s fifth-largest economy by the end of 2024. It is unclear what the deal means for the potential prospects of Israel-Indonesia relations.