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Free Trade Agreement Indonesia Taiwan

Free Trade Agreement Indonesia Taiwan

Free Trade Agreement between Indonesia and Taiwan: What You Need to Know

Indonesia and Taiwan have recently signed a Free Trade Agreement (FTA) on Nov. 6th, 2020, after nine years of negotiations. The agreement is expected to increase trade and investment between the two countries and strengthen their economic relationship. In this article, we will take a closer look at the FTA between Indonesia and Taiwan and how it impacts both countries.

What is a Free Trade Agreement?

A Free Trade Agreement (FTA) is a treaty between two or more countries that eliminates tariffs and quotas on goods and services traded between them. The FTA promotes trade and investment by removing barriers, such as taxes and quotas, which often reduce economic efficiency and increase the cost of goods and services. The FTA also helps to protect intellectual property rights, provide access to government procurement, and promote fair competition.

What are the benefits of the Indonesia-Taiwan FTA?

The FTA between Indonesia and Taiwan is expected to provide numerous benefits to both countries. According to the Ministry of Economic Affairs of Taiwan, the agreement is expected to increase trade between the two countries by 40%. Moreover, it will enable Indonesia to have greater access to Taiwan`s technology and investment, and Taiwan will have easier access to the Indonesian market.

Under the FTA, around 277 Indonesian products will be eligible for tariff reduction or exemption when exported to Taiwan. Additionally, over 1,000 Taiwanese products will receive a similar benefit when exported to Indonesia. These tariff reductions and exemptions will make products more affordable and increase trade volume between the two countries.

Moreover, the FTA also includes provisions to promote cooperation on intellectual property rights protection, e-commerce, and government procurement. These provisions aim to strengthen the economic relationship between the two countries and protect businesses from unfair trade practices.

How will the FTA impact Indonesia and Taiwan`s relationship?

The FTA is expected to boost economic ties between Indonesia and Taiwan and strengthen their relationship. According to the Indonesian Ambassador to Taiwan, the FTA is the first comprehensive agreement Indonesia has signed with another country. The agreement shows Indonesia`s commitment to promoting trade and investment and strengthening economic ties with Taiwan.

Moreover, the FTA is expected to help Taiwan diversify its economic relationship with Southeast Asia, as it currently relies heavily on China. The agreement with Indonesia provides Taiwan with an opportunity to build new economic partnerships and reduce its reliance on China.

Conclusion

The Indonesia-Taiwan Free Trade Agreement is a significant development in the economic relationship between the two countries. The FTA is expected to provide numerous benefits to both countries, including increased trade, improved access to the Indonesian market, and strengthened economic ties. The agreement provides an opportunity for both countries to diversify their economic relationships, reduce reliance on China, and promote fair trade practices. As the FTA is implemented, both countries can look forward to a brighter economic future.

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