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JAKARTA – Indonesia and the United Arab Emirates signed a free trade agreement on Friday, strengthening economic ties between Southeast Asia’s largest economy and major oil-producing Gulf states.
The Comprehensive Economic Partnership, signed in Abu Dhabi, will eliminate or substantially reduce tariffs on most goods traded between the two countries.
Indonesia’s trade ministry said the agreement includes chapters on services, investment, intellectual property and mutual recognition of halal certification.
Emirati officials had no immediate comment. UAE Minister of Economy Abdullah bin Touq, UAE Minister of State for External Trade Thani Al Zeyoudi and Indonesian Minister of Trade Zulkifli Hasan will hold a press conference later on Friday.
The text of the agreement was not released immediately and still needs to be approved by Indonesia’s parliament, which could take several months.
The oil-rich UAE has forged closer trade ties with Indonesia as part of its ambition to double its economy to $816 billion by the end of the century, in part because of a free trade agreement.
Indonesia’s trade ministry said trade in goods between Indonesia and the UAE was worth about $4 billion last year.
According to the Economic Complexity Observatory, Indonesia’s main exports to the UAE are palm oil, jewellery and precious metals, while the UAE’s exports to Indonesia are mainly LPG and non-crude, iron and non-alloy steel.
“This agreement will serve as Indonesia’s entry point into the UAE…a hub to increase exports to non-traditional destination countries such as the Gulf, Middle East, Africa and South Asia,” Indonesia’s Hassan said in a statement.
(Reporting by Bernadette Christina in Jakarta and Alexander Cornwell in Dubai, Writing by Alexander Cornwell; Editing by Toby Chopra)
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