TEHRAN - The director general of the East Asia-Pacific Office of the Trade Promotion Organization of Iran (TPO) announced that the Preferential Trade Agreement (PTA) between Iran and Indonesia is going to go operational soon to enhance trade-economic ties.

Kaveh Daliri said Indonesia is a lucrative market for Iranian products, Mehr News Agency reported.

Increasing the trade exchanges and cooperation between the two countries is the main objective behind signing the agreement, he said, adding that countries facilitate the process of entering each other's markets by considering tariff discounts.

The two countries intend to set up a joint committee for the operationalization of the preferential trade agreement which is tasked with monitoring and updating the lists and discounts that Iran and Indonesia consider for each other.

Indonesia has the highest Muslim population in the world, so this Southeast Asian country is a good and profitable market for Iranian products, Daliri underlined

Once the preferential trade agreement is signed, the volume of the trade exchanges between the two countries will considerably increase, the director general emphasized.

Raw materials for edibles, oil-based materials, medical equipment with high added value, and electronic parts are among the export products that the two sides have considered discounts, the TPOI official added.

Earlier on May 17, the Iranian Parliament gave the go-ahead to PTA with Indonesia. The lawmakers passed a bill on the preferential trade agreement between Iran and Indonesia after discussing a report from the Parliament’s Economic Commission in that regard.

The PTA was signed between Iranian President Ebrahim Raisi and his Indonesian counterpart Joko Widodo in Jakarta on May 23, 2023.

Writing on his official X account, Iran’s Deputy Minister of Agriculture Alireza Peimanpak hailed the agreement as the first PTA with an Asia-Pacific country.

Indonesia is one of the world's consumption markets, and this country's market is the main destination for many countries' export goods. Considering Indonesia’s membership in the World Trade Organization (WTO) and low tariffs for imports to this country, Iran can also take advantage of the economic status of Indonesia and expand its trade with this country.

In recent years, Iran has started to sign preferential trade agreements with other countries to expand its economic relations through the reduction of tariff rates. A clear example of this policy is the trade agreement with the Eurasian Economic Union (EAEU) and Pakistan, based on them zero tariffs are to be applied on at least 100 items.

The data of the last decade of Iran's trade with Indonesia show that the peak of Iran's trade relations with this country was in the Iranian calendar year 1400 (ended on March 20, 2022), which can be a turning point in the history of trade between the two countries.

Iran's 10-year exports to Indonesia show that in 1400, the highest value of exports to Indonesia occurred in the last ten years, which was $1.081 billion.

Iran’s export to Indonesia in the last ten years shows an upward trend, as the exports to this country have increased from 60 million dollars in 1392 to more than one billion dollars in 1400. This is a sign of the potential of relations between the two countries in the economic area.

EF/