Image: Reuters Berita 24 English - A free trade agreement was struck between Indonesia and the United Arab Emirates on Friday, expanding li...
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| Image: Reuters |
Berita 24 English - A free trade agreement was struck between Indonesia and the United Arab Emirates on Friday, expanding links between the largest economy in Southeast Asia and the key Gulf oil producer.
The agreement, agreed during Indonesian President Joko Widodo's trip to Abu Dhabi, will eliminate or significantly lower levies on the majority of commodities exchanged between the Muslim nations.
The UAE economy ministry claimed that reduced or removed tariffs will help Emirati petrochemicals, rubber products, plastics, steel, food products, fashion apparel, and palm oil from Indonesia.
According to Indonesia's commerce ministry, the agreement has chapters on services, investments, intellectual property rights, and reciprocal recognition of one another's halal certification.
The agreement's content has not yet been made public, and both nations must yet ratify it. While this process is mostly formal in the dictatorial UAE, it may take months in democratic Indonesia.
According to the Observatory of Economic Complexity, the main exports from Indonesia to the UAE are palm oil, jewellery, and precious metals, while the main imports from the UAE into Indonesia are petroleum gases, non-crude oils, iron, and non-alloy steel.
In an effort to expand its own GDP to $816 billion by the end of the decade, the oil-rich UAE has strengthened commercial links with Indonesia, in part by signing free trade agreements.
Similar agreements were inked this year with Israel and India.
According to Abdullah bin Touq, minister of economy for the Emiratis, the pact with Indonesia may push bilateral non-oil commerce from about $3 billion last year to $10 billion in five years.
Zulkifli Hasan, the Indonesian Minister of Trade, stated that Jakarta anticipates increased UAE investment in Indonesia as a result of the agreement, which he claimed will increase exports to the Middle East and other regions.
A important commerce hub for the Middle East and portions of Africa, Asia, and Europe is the United Arab Emirates, a nation of about 10 million inhabitants.
The UAE will gain from having more access to the over 270 million-person Indonesian market at a time when that country is broadening its trade relationships and looking to provide jobs for its 1 million citizens.
Thani Al Zeyoudi, the Emirati Minister of State for Foreign Trade, told Reuters that the government expected the trade agreement to generate 55,000 high-skill employment in the UAE by 2030.
"Our GDP will increase by around $4.6 billion by 2030. By 2030, it will raise imports by $2.6 billion and exports by $3.2 billion, he said in an interview.
With at least a dozen additional nations, including Australia and South Korea, the UAE is now negotiating bilateral free trade agreements.
We're nearly finished with Colombia. It will be inked in the upcoming weeks, according to Al Zeyoudi, who also said that an agreement in Turkey would be achieved before the year is over.
