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KBRN, Santiago: The Indonesian Ministry of Trade (MoT) is encouraging the penetration of Indonesian products to South America through Chile. It was conveyed by the Director General of National Export Development (PEN) of the Ministry of Trade Didi Sumedi as the leader of the Indonesian Trade Mission Delegation to Chile on 9-10 May 2024. "The Ministry of Trade is committed to continuing to encourage Indonesian products to enter non-traditional markets, one of which is the South American region. Chile has a strategic position among other South American countries because it can be an entry point for Indonesian products to the South American region," Didi said.

Didi also said that this trade mission aims to encourage increased trade potential and economic partnership between the two countries after the implementation of IC-CEPA in 2019. "Through the utilisation of the IC-CEPA trade agreement, the potential value of trade between the two countries can still be increased to USD 1 billion. The Trade Mission to Chile is also a form of the Ministry of Trade's contribution in supporting the National Export Enhancement Task Force, and Chile is one of the priority countries targeted to increase exports," Didi said.

Chile is a country with a very open economy. Chile has signed 34 free trade agreements (FTAs) with 64 countries including Indonesia. IC-CEPA alone eliminates 89.6 per cent of the total tariff posts. Therefore, Indonesian businesses can take advantage of it through the use of the Certificate of Origin (SKA) Form IC-CEPA. "IC-CEPA has had a positive impact on increasing the value of Indonesia-Chile trade by 21.73 per cent compared to the value of trade before IC-CEPA," said Djatmiko.

In this trade mission, there were nine business players and associations participating. The businesses and associations are engaged in various sectors such as palm oil products and their derivatives, pesticides, chemical products, vehicle parts, and packaging. Meanwhile, the Indonesia-Chile business forum attended by more than 70 Chilean business players, followed by one on one business matching between Indonesian companies and Chilean business players, has successfully recorded potential transactions worth USD 7.45 million or Rp 119.20 billion. Potential transactions were generated from palm oil products and their derivatives, motor vehicle parts, and plastic packaging. In addition, a business meeting was also held with the Chilean Confederation of Industries (Sociedad de Fomento Fabril/ SOFOFA) and representatives of the Chilean Government in the field of international economic relations (Subsecretatia de Relaciones Economicas Internationales Chile/SUBREI).

The meeting aimed to encourage the involvement of Indonesian and Chilean businesses, as well as broader cooperation and mutual benefit for both countries. In a series of trade missions to Chile, a number of business visits were made, namely to Jumbo Supermarket, an importer of Mannheim automotive parts, an importer of Area Design furniture, and an importer of Indonesian bicycles, Cross Mountain. Jumbo Supermarket, which is the largest retailer in South America, has imported noodle products from Indonesia with several variants and flavours. Jumbo Supermarket expressed interest in trying coconut products from Indonesia. In response, Didi welcomed and will facilitate Jumbo's meeting with Indonesian companies that produce coconut products.

In addition, during a visit to Chile's leading importer of vehicle parts, Mannheim, the Ministry of Trade facilitated a meeting between Indonesian vehicle parts businesses and Chilean importers. The Ministry of Trade also supports other potential automotive parts products to enter the Chilean market. Didi Sumedi, the leader of the Indonesian trade delegation, said that in addition to food and vehicle parts, the growth potential of the furniture industry in Chile is also very promising. During a visit to Area Design, a prestigious furniture supply company in Chile, Didi found that 70 per cent of its products come from Indonesia.

Didi believes that through the preferential tariff scheme of the IC-CEPA, which has entered the implementation stage, the performance of Indonesian furniture exports to Chile will continue to increase. "Moreover, because Indonesian furniture products can compete in the Chilean market in terms of price with similar products from other countries," Didi added.

Meanwhile, at a meeting with Cross Mountain, which is a well-known importer of sports products in Chile, Didi invited Cross Mountain, which has also imported mountain bikes from Polygon Indonesia, to take advantage of the IC-CEPA tariff reduction scheme to increase the volume and value of bicycle imports from Indonesia. "Bicycles are one of the products that receive preferential tariffs on import duty reductions under the IC-CEPA scheme," Didi concluded.

Source: Indonesian Ministry of Trade