Korea, Indonesia to ink trade pact

President Park Geun-hye agreed with her Indonesian counterpart Susilo Bambang Yudhoyono to wrap up talks on a comprehensive economic partnership agreement (CEPA) this year, Saturday.

In addition, the two leaders promised to further develop a strategic partnership both locally and globally for the 40th anniversary of the two country’s diplomatic ties.

“The two sides agreed to make continuous efforts to reach its goals of attaining a trade volume of $50 billion in 2015 and $100 billion by 2020,” the two sides said in a post-summit statement. Their total trade volume amounted to $29.6 billion last year.

“Recognizing the recent meaningful advancement in the Korea-Indonesia CEPA, the two sides agreed to conclude the negotiation by the end of this year. In the process, Korea will try to expand its investments in Indonesia.”

The CEPA, which is broader than a free trade agreement, is a tool to attain the ambitious goals of economic cooperation, according to Cheong Wa Dae officials.

Park and Yudhoyono also pledged to keep the two states’ win-win cooperation in the defense industry through transferring Korea’s technological knowhow to Indonesia in return for defense contracts.

Last year, Daewoo Shipbuilding & Marine Engineering (DSME) clinched a deal to export three submarines to Indonesia. One of the ordered submarines will be constructed here with some 150 Indonesian workers participating in the project.

Plus, approximately 40 Indonesian engineers would be trained in Korea by 2018 when the three submarines are scheduled to be delivered to the buyer.

In 2011, the Yudhoyono administration also inked a $400 million pact for purchasing 16 T-50s to mark the first export of the trainer jet.

On the occasion of Park’s state visit to Jakarta, the two sides minted a total of seven memorandum of understanding (MOUs) in such segments as financial collaboration and technology sharing.

Indonesian media estimated that the whole value of the seven agreements would be in the neighborhood of $10 billion when they proceed as planned.

“We agreed to expand the alliance in the global scene. I am grateful as Indonesia played a big role to improve the relationship between Korea and the Association of Southeast Asian Nations (ASEAN),” Park said in a media briefing after the summit.

“In answer, President Yudhoyono expressed his willingness to cooperate for the success of the special summit between Korea and the ASEAN members that will take place in Seoul in Dec. 2014.”

Park also invited Yudhoyono to visit Korea.