Kenya and Indonesia to Sign a Trade Agreement
Indonesia and Kenya are expected to sign a trade deal this month in July. This trade deal will allow businesses from both countries to import as well as export with each other at more, favourable rules, regulations, prices as well as a significant reduction in other barriers that could prevent easy and seamless trade. In this article, we would be elaborating more as to this new trade partnerships between the East African country as well as the Southeast Asian Nation. For more of such articles and news related to global trade as well as logistics , please click here.
This month in July 2017, the Indonesian Ministry of Trade Officials would be travelling to Nairobi, which is Kenya’s capital. Over there, they would commence negotiations of the new trade deal with the Kenyan officials. This trade deal is a Preferential Trade Agreement between the two nations. A Preferential Trade Agreement is a trading bloc that allows certain products to have access to the partnering countries. The Preferential Trade Agreement does not remove tariffs. Rather, they reduce the cost of them instead. This is different when compared to a Free Trade Agreement (FTA), where trade barriers including tariffs are usually removed . The Preferential Trade Agreement is also known as a PTA.
According to Indonesian Foreign Vice Minister, the Indonesia government is ‘serious’ about making the agreement woke. Indonesia and Kenya are both fast growing economies with immense opportunities for trade as well as investments.
As of date, Indonesia imports Cocoa as well as Coffee from Kenya. While the East African country imports a wide array of materials such as paper products, tyres, oil, palm oil as well as pharmaceutical products. As of last year in 2016, the value of trade between the two nations amounted to more than 200 million dollars. This means that there is immense potential for the value of trade to grow as both countries have a higher value in their respective gross domestic product (GDP).
There will also be forums to educate people on the investment opportunities that are available in both countries based on infrastructure, finance, textile, tourism as well as energy.The Kenya National Chamber of Commerce as well as the Indonesian Chamber of Commerce have signed agreements so as to improve trade relations between the two countries. This is expected to boost trade cooperation as well as interaction between Indonesia and Kenya.
In essence, both countries are looking for reduction in trade tariffs as well as the presence of other trade barriers. This as a result, would allow the businesses of both countries to trade easily with each other and contribute to each other’s economy.
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