South Korea and Indonesia have concluded negotiations on their Comprehensive Economic Partnership Agreement (CEPA). They are going to officially sign the agreement in the first half of next year so that it can become effective through parliamentary ratification.
A CEPA is a trade agreement similar to a free trade agreement. The CEPA between South Korea and Indonesia is to open their commodity markets to a substantial extent. Specifically, South Korea and Indonesia will raise their degrees of import tariff elimination to 95.5 percent and 93 percent, respectively.
Once the agreement becomes effective, South Korea’s major export items in its trade with Indonesia can be exported tariff-free to the country. The items include hot-rolled steel sheets, cold-rolled steel sheets, plated steel sheets, synthetic resins, and automobiles and auto parts. The current tariff rates are 5 percent for hot-rolled steel sheets, synthetic resins, and automobiles and auto parts and 5 percent to 15 percent for cold-rolled steel sheets and plated steel sheets.
In particular, steel products for use in automotive steel sheets, automotive transmissions, automotive sunroofs, and synthetic resins will be subject to immediate tariff elimination.