Indonesia hopes for large investments following EFTA deal

Indonesia hopes that the four European Free Trade Association (EFTA) countries will make large investments in the country once they seal a free-trade agreement.

According to an industry official such investment will be necessary to turn around continuing trade deficits with technologically more advanced EFTA countries.

EFTA comprises four European nations; Iceland, Liechtenstein, Norway and Switzerland, which are among the world’s richest in income per capita terms.

Apart from narrowing the trade gap, the investment could also help both sides build synergy in a wide range of manufacturing activities for exports to the rest of the world, Agus added.

Trade was US$2.22 billion in goods and commodities with EFTA in 2012, down by 55.51 percent from $4.99 billion a year earlier, according to statistics from the Trade Ministry.

Exports accounted for $587.18 million, while imports amounted to $1.60 billion, resulting in a deficit of $1.04 billion.

Exports were mainly apparel, footwear, furniture, wood products and electrical machinery, while imports were pharmaceuticals and machinery.

The seventh round of talks on the partnership will take place in the upcoming weeks.

During the six previous rounds of negotiations, Indonesia offered to remove import tariffs on goods from EFTA immediately after the pact is signed, provided firms from the four countries invested at least $50 million.

Norwegian Ambassador Stig Traavik said that Norwegian firms were keen to channel new investment into the oil and gas, fisheries and technology-intensive sectors, and the agreement would considerably facilitate this process.

Source: thejakartapost.com

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