FTA with Indonesia
It was reported that South Korea’s President Park Geun-hye is expected to reach a deal on the Comprehensive Economic Partnership Agreement (CEPA) between Korea and Indonesia with Indonesian president Susilo Bambang Yudhoyono by the end of this year, on a four-day state visit to Indonesia starting on October 10. If the deal is clinched, it will be the first Free Trade Agreement (FTA) for the Park administration.
A senior government official said, “To the best of my knowledge, President Park initially planned to wrap up the Korea-Indonesia CEPA on her state visit, which begins on October 10. But instead, she will announce a plan to seal the deal at the end of the year, for the negotiations on the agreement have not been completed yet.”
It is anticipated that CEPA’s finalization will accelerate the economic and industrial exchange between the two countries. The Korean government already has economic ties with Indonesia through the ASEAN FTA, but the agreement is not comprehensive. Most of the major exports, including finished cars, are excluded from the concession list. In fact, Korean vehicles only represent 1-2% of the Indonesian auto market, while Japanese autos constitute approximately 90% of the market.
Seoul started to negotiate for the Korea-Indonesia CEPA in July 2012 in order to increase the level of FTA with the largest economy and the most populous country among the ASEAN nations. Considering the two governments' effort, it is high likely that both sides will reach a deal on CEPA in the 6th negotiation at the end of this year, held after the upcoming summit meeting.