Indonesia is expected to sign a trade agreement with the Islamic Republic of Iran as soon as next week, according to a statement released by the Indonesian Trade Ministry.
This announcement comes at the end of a process of seven rounds of negotiations, which have now been completed successfully. According to the statement, the signing of the agreement, which will be called the Iran Preferential Trade Agreement (II-PTA), will be the last stage of the negotiation process.
"Iran is a non-traditional trade partner with much potential for Indonesia. With this PTA, we hope that the export opportunities for Indonesia's main and potential products will increase and reach a wider market, especially in the Middle East and Persia," said the Director of Bilateral Negotiations at the Indonesian Trade Ministry, Johni Martha.
The agreement will be signed during Raisi's visit
The signing of the agreement will be held during the upcoming visit of Iranian President Ebrahim Raisi to Jakarta between May 22 and 24, the ministry stated.
Martha commended both countries on the fruitful negotiations, saying: "With intensive communication and good collaboration, pending issues have been successfully resolved.
"Both parties have shown mutual flexibility and a strong commitment to immediate and complete discussions on several articles in the II-PTA that could not be agreed upon at the previous meeting," he added.
Total trade between Indonesia and Iran until March of 2023 reached USD 54.1 million, according to the ministry's statistics. Meanwhile, the total trade between the two countries in 2022 amounted to USD 257.2 million.
Indonesia mainly exports peanuts, motorcycles, industrial monocarboxylic fatty acids, wood fiber, and vehicle parts and accessories to Iran.
Meanwhile, its main import commodities from Iran are dates, hydrocarbons (e.g. oil and gas), vegetable alkaloids,instruments, machines and models designed for demonstration purposes, and wine.
Indonesia is currently the globe’s 15th largest economy. It has a GDP of $1.23 trillion and an annual growth rate of 5.7%. Experts predict that by the end of 2024, Indonesia could be the world’s fifth-largest economy.
It is unclear what this agreement might mean for the potential prospect of Israeli-Indonesian relations.
Mark Regev contributed to this report.