Abu Dhabi: The UAE signed a wide-ranging economic pact with Indonesia which will eliminate tariffs and boost bilateral trade.
This is the third such deal signed by the UAE this year, following the CEPAs with India and Israel, and is designed to increase annual bilateral trade to $10 billion within five years by removing trade barriers on a wide range of goods and services, creating new opportunities for UAE exporters.
Under the trade deal, over 80 per cent of UAE exports will gain immediate duty-free access to Indonesia. The deal is expected to increase the total value of trade in services between the UAE and Indonesia to $630 million by 2030. Streamlined customs procedures and an emphasis on digital trade will make it easier for UAE companies to do business with Southeast Asia’s biggest economy, which is set to grow 5.4 percent in 2022.
“Not only is it my hope that this agreement creates a new platform for cooperation, investment and knowledge transfer, but also offers us new tools to navigate future challenges and opportunities together,” said President His Highness Sheikh Mohamed bin Zayed Al Nahyan. “Like all our new trade deals, this is part of a dynamic plan to build a network of trade alliances with some of the world’s fastest growing economies.”
“This will set us on the path to prosperity outlined in our Projects of the 50 initiative that aims to make the UAE a truly global business hub,” Sheikh Mohamed added.
The CEPA is expected accelerate more than $10 billion of investment projects in priority sectors such as agriculture, energy and infrastructure, particularly logistics, while also encouraging future cooperation in tourism, entrepreneurship and healthcare.
The Indonesian President Joko Widodo stressed that the agreement reflects an ambitious leap in cooperation between the two countries and a solid base that will push the bilateral relations to a new, more prosperous stage of faster development that will meet the aspirations of the two friendly peoples.
The new future
Rapid technological progress in emerging sectors such as clean and renewable technology, cloud computing and automation will also be pursued. The landmark deal will also unlock the potential of the south-south corridor and accelerate the shift towards a new global economic centre – the new Asian future.
The UAE and Indonesia launched CEPA negotiations in September 2021 to drive the post-COVID recovery. Deep business, cultural and diplomatic ties have anchored the mutually beneficial UAE-Indonesia partnership, with non-oil bilateral trade standing at $3 billion in 2021, up 62 per cent from 2020 and 17 per cent from 2019.
Both countries have continued to explore closer collaboration by working together on a wide range of strategic projects, including the world’s biggest floating solar power plant. The UAE also pledged $10 billion to the new Indonesia Investment Authority, while the Indonesian government became the largest Sukuk issuer on Nasdaq Dubai in May 2019.
- The implementation of a joint project aimed at growing mangroves between the Ministry of Climate Change and Environment and the Coordinating Ministry for Maritime and Investment Affairs of Indonesia.
- A cooperation protocol between the Ministry of Defence and its Indonesian counterpart.
- An MoU between the Mohamed bin Zayed University for Humanities and Nahdlatul Ulama University of Yogyakarta.
- A contract for the purchase of a landing platform between the Tawazun Economic Council and Indonesian company “SOE”.