The Indonesian Trade Ministry and Canada’s Trade Facilitation Office (TFO), a nonprofit organization, signed on Tuesday a memorandum of understanding (MOU) on cooperation in export promotion amid the subdued global trade caused by COVID-19.
Kasan Muhri, the director general of national export development at the ministry, said on Tuesday the partnership was aimed at promoting exports of processed food products and information and technology services.
The two parties plan to team up for promotional activities with a special focus on women-led small businesses, capacity building and technical assistance for exporters, while exchanging information on export development and trade-related opportunities.
“In this case, the [directorate general] will encourage Indonesian exports, which in recent years have faced many obstacles, including COVID-19, which has made businesses more careful in conducting trade partnership relations,” Kasan said in a virtual press conference on Tuesday.
The cooperation follows Indonesia’s attempt to boost trade, which has been depressed by the ongoing global health crisis.
Although the country recorded the biggest trade surplus in nine years in July, exports still declined by 9.9 percent year-on-year (yoy) to US$13.73 billion, while imports nosedived 32.55 percent yoy to $10.47 billion, according to Statistics Indonesia (BPS) data.
The World Trade Organization (WTO) has forecast global trade will contract by between 13 and 32 percent at worst this year.
Indonesia’s envoy to Canada Abdul Kadir Jailani said that the new cooperation laid further groundwork to step up trade between the two countries, either in the form of regional or bilateral free trade agreements.
“A bilateral free trade agreement will not only boost bilateral trade. But more than that, it will also help to enhance competitiveness, attract more Canadian investment to the country and pave pathways to wider areas of cooperation and untapped potential,” said Jailani, who also represents Indonesia at the International Civil Aviation Organization (ICAO).
Indonesia’s merchandise exports to Canada amounted to $844.65 million in 2019, marking an 8.2 percent decline from a year earlier, according to data from the United Nations International Trade Statistics Database (UN Comtrade).
Rubber topped Indonesia’s exports last year reaching $104.20 million, followed by footwear, iron or steel and uncoated paper.
Indonesia is Canada’s largest export market in Southeast Asia. Canada’s top export to Indonesia last year was wheat, which amounted to $701 million. It was followed by fertilizers and wood pulp.
“So, we have worked in areas such as apparel, coffee, footwear, processed food and services,” said Steven Tipman, the executive director of TFO Canada.
“Today’s MOU signing will really serve as the umbrella agreement for the cooperation of both our organizations in the areas of trade promotion and capacity building of Indonesian trade support institutions, as well as [small and medium enterprises].”
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