SEOUL, Feb. 3 (Yonhap) — South Korean plastic, auto parts and steel companies are expected to benefit from a trade deal with Indonesia once it goes into effect, a trade body said Wednesday.
South Korea and Indonesia formally signed the comprehensive economic partnership agreement (CEPA) in December last year, clearing the way for local exporters to tap deeper into the Southeast Asian market. The deal awaits parliamentary ratification in both countries.
Under the trade deal, Jakarta would eliminate tariffs on about 92 percent of imports from South Korea, 11.9 percentage points higher than Seoul’s free trade agreement with the Association of Southeast Asian Nations (ASEAN).
South Korean exports of plastics, rubber and auto parts products would be free from tariffs as soon as the CEPA takes effect.
“South Korean makers of plastics and auto parts will likely benefit from the CEPA as Indonesia’s plastics and auto industries are forecast to grow stably down the road, the Korea International Trade Association said in a report on the bilateral trade deal.
KITA also said the CEPA may have a positive impact on South Korean steelmakers as it calls for phasing out tariffs seven years after their implementation.
The trade body called for the swift ratification of the trade deal with Indonesia, the world’s fourth-most populous nation with 270 million people and Southeast Asia’s biggest economy with a gross domestic product of US$1.1 trillion.
The CEPA is equivalent to a free trade deal but centers on a broader scope of economic cooperation. The Seoul-Jakarta CEPA marks South Korea’s third individual trade pact to be signed with a Southeast Asian nation.