South Korea and Indonesia have agreed to bring forward the signing of their free trade agreement (FTA) to reduce the economic fallout from the COVID-19 pandemic.
According to national media, the two countries agreed on 6 April 2020 that an official signing ceremony for the Comprehensive Economic Partnership Agreement (CEPA) would be held at the earliest possible opportunity, but it is not yet certain exactly when.
Having been agreed in November 2019, the two countries aimed to hold a signing ceremony at an unspecified date in 2020.
The CEPA will open up 93% of Indonesia’s market to South Korean businesses, up from the current level of 80%.
Indonesia will lift tariffs on South Korean steel, auto parts, textiles and machine parts. In return, South Korea will lift tariffs on products including oil, sugar and beer from Indonesia.
The two countries have pledged to cooperate economically, so much so that the CEPA will be greater than a standard FTA. This will be particularly important in helping the global economy recover from the pandemic.
South Korea’s Trade Minister Yoo Myung-hee said the international community must “join forces to sustain the global supply chain and to ensure the travel of vital business officials”.