Indonesia to boost trade ties with Vietnam
Economic trade ties between Vietnam and Indonesia are expected to be strengthened so as to improve trade activities with the Association of Southeast Asian Nations (ASEAN). According to Indonesian Trade Minister Mr Enggartiasto Lukita, the strategy is to improve the strength of Vietnam’s position as Indonesia’s main regional chain of supply in ASEAN.
In this article, we would be analysing the strengthening of trade ties between Indonesia and Vietnam and also what it could mean for the two countries as well as ASEAN.
Indonesian Trade Minister Mr Enggartiasto Lukita mentioned that it only made sense that Indonesia should cooperate withVietnam instead of directly competing with the nation. This statement was issued during the seventh Indonesia–Vietnam Joint Commission on Economic, Science, and Technical Cooperation (JC-ESTC) held on Saturday, 12 August 2017.
During the JC- ESTC event, the Indonesian representatives talked about access to the Vietnamese market with many products such as medicines, coal, wagyu beef, eggs and many more. On the other hand, the Vietnamese counterparts mentioned about Indonesia’s trade safety policy, horticulture imports, and local contents.
Mr Enggartiasto Lukita stated that Vietnam is third largest market in the ASEAN region, which is right behind Indonesia and Philippines, which has about 93.3 million people and has a rapid growth in its middle class of about seventy percent.
It is critical for Indonesia to partner Vietnam not only because it is a country of massive economic potential but also how it is starting to open its borders more to foreign investments in the form of bilateral Free Trade Agreements (FTA) with many of its neighbouring countries.
Some Indonesian firms run businesses in Vietnam’s property, cement and coal sectors while Vietnamese firms are interested in Indonesia’s coal industry.
Indonesia has observed a trade deficit with Vietnam from 2012 to 2016 with the largest deficit of US$966.5 million occurring in 2014 before improving to $182.6 million, last year.
Total trade reached $6.2 billion last year, with Indonesia exporting $3 billion, dominated by many items such as copper, pepper, ground fruits, coconuts, coal, palm oil and its products.
In the first five months this year in 2017 however, Indonesia has managed a trade surplus of $5.1 million
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