During the first half of 2024, the Andean country's exports to the Asian power have grown by 276%, while the trade agreement is approaching its final approval phase.
Peru has found a new strategic partner in the competitive Asian market. It is Indonesia, the world's fourth most populous country with 276 million inhabitants. The nation made up of more than 10,000 islands aims to agree a Comprehensive Economic Partnership Agreement (IP-CEPA) with Peru, which would be the biggest milestone since both nations established diplomatic relations in 1975.
Everything points to the closing of negotiations taking place during the APEC summit in November in Lima or at the latest in the first quarter of 2025. For now, this week the Embassy of the Asian country in Peru offered a press conference, within the framework of the Indonesia - Latin America and the Caribbean Business Fair and Forum (INA-LAC 2024), in which it highlighted the significant growth in shipments between Lima and Jakarta. The event was led by Ichsan Firdaus, head of the Political Section of the Indonesian Embassy in Peru and Mónica Chávez, Foreign Trade Manager of the Lima Chamber of Commerce (CCL).
“Our trade has seen an upturn from January to June 2024, with exports to Indonesia increasing by 276% and imports increasing by 27.1% compared to the same period last year,” said Chavez.
The CCL spokesperson also highlighted the progress in the negotiations for the FTA between Peru and Indonesia. “From August 26 to 29, all the relevant representatives and officials were there, conducting the second round of negotiations on aspects such as, for example, rules of origin, market access, technical barriers to trade, sanitary or phytosanitary measures, as well as customs procedures and everything that involves signing a treaty of this magnitude,” said the executive.
Later during the press conference, Firdaus revealed that this edition of INA-LAC will not only promote Indonesia as a business and tourism destination for Latin America, but will also include discussions on strategies to promote the use of renewable energy, food security and water management.
As for the exports that Indonesia seeks to increase, the most notable are products linked to the automotive industry, such as vehicle spare parts or natural rubber, used to manufacture tires and electronic parts. On the other hand, the country is interested in buying cereals, wheat flour, animal feed, sugar and cocoa, according to Iwan F. Susantoh, co-president of the INA-LAC commission. The latter also highlighted that Peru and Indonesia can cooperate in the manufacture of electric car batteries as they are large producers of copper and nickel, respectively.
Likewise, the inauguration of the Chancay megaport, scheduled for November 2024, is viewed with optimism due to the creation of a regional hub that will streamline trade between Latin American countries and Southeast Asia.
Asked about the reasons behind the remarkable increase in exports between Peru and Indonesia, Firdaus said improved communications post-pandemic and friendly legislation have contributed to the trade balance.
“Regulations for importing products from Peru to Indonesia are easier. We can anticipate that in two or three years, Peru's exports and imports will continue to increase, because the country joined the Association of Southeast Asian Nations (ASEAN) as a development partner in January of this year,” Firdaus told AméricaEconomía .
The Indonesian spokesman later revealed that the Indonesian Embassy in Lima is increasingly receiving requests from Peruvian companies wishing to import their products to Indonesia and vice versa.
