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Indonesia-Iran agree to finalize trade negotiation in 2017

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Antara News | 11 July 2017

Indonesia-Iran agree to finalize trade negotiation in 2017

Indonesia and Iran have agreed to finalize negotiation on the Preferential Trade Agreement (II-PTA) by the end of 2017, to expand access and diversify of exported products to non-traditional markets.

Chief of the Indonesian team in the negotiation Made Ayu Marthini stated that a wider access for Indonesian as well as Iranian products to the market is expected to increase bilateral trade to US$2 billion per year.

"To benefit the momentum of implementation of Joint Comprehensive Plan of Action (JCPOA), Indonesia and Iran have shared optimism to finalize II-PTA by the end of 2017," Made noted in a statement here on Monday.

Indonesia and Iran on Sunday held the third negotiation on II-PTA in Tehran, Iran, after it was stalled in 2015.

During the negotiation, both countries discussed draft text on II-PTA, modality, and request list to facilitate products that would have the preference to be exported to each countries.

"Thus business operators from both Indonesia and Iran could get maximum benefit from the II-PTA," made remarked.

Both countries have sought the agreement to set payment mechanism in the transaction; thus, businessmen would not only enjoy tariff reduction but also exemption or reduction of transaction cost when the II-PTA is implemented.

II-PTA is an agreement between Indonesia and Iran to reduce or abolish some export tariffs from both countries. The legal basis for the agreement was signed in 2005 by both trade ministers in Tehran.

In 2008, the two countries have agreed to establish the Trade Negotiating Committee (TNC) to negotiate the II-PTA.

The first negotiation was held in 2010, followed by the second negotiation in 2015.

Bilateral trade between Indonesia and Iran during January-March has increased significantly by 457.36 percent, compared to the same period of 2016.

The total trade between the two countries reached US$338.6 million in 2016, up by 23.99 percent compared to US$273.1 million of trade in 2015.

Based on a data of the Indonesian Trade Ministry, bilateral trade between Indonesia and Iran during 2012 was recorded at US$1.3 billion, down by US$568.4 million in 2913.

The trade dropped further to US$448.7 million in 2014, and reached its record low in 2015.

 source: Antara News