Indonesia is seeking to sign its trade pact with Sri Lanka by next March, expressing hope that one year of negotiations will suffice to close the deal.
The formal discussion on the preferential trade agreement (PTA) between Indonesia and Sri Lanka began only a few weeks ago.
The first round of negotiations, conducted virtually earlier this week, focused on establishing the work plan and draft agreement text. Subsequent rounds will delve into more substantive chapters.
According to a press statement by the Trade Ministry, “Indonesia and Sri Lanka are … aiming to substantially conclude the negotiations by end-2024. We have also set a target to sign the agreement in March 2025.”
The second round of talks is scheduled to take place in Colombo on June 19-20, focusing on the text concept and market access.
Deputy Trade Minister Jerry Sambuaga highlighted during the negotiations launching ceremony last month that the PTA could serve as a precursor to a free trade agreement (FTA). While a PTA has limited scope, an FTA typically aims to eliminate tariffs across all or most goods. Jakarta also noted that the upcoming PTA could facilitate better access to the Sri Lankan market for Indonesian goods such as palm oil, paper, and fatty acid.
In 2023, Indonesia-Sri Lanka trade was valued at $369.7 million, with Indonesian exports to Sri Lanka accounting for $326.6 million of the total. In January 2024 alone, bilateral trade amounted to $23.5 million.
Indonesia primarily exports copra, petroleum, paper, cartons, tobacco, and coal to Sri Lanka. Knitted fabrics and tobacco processing machines were among Indonesia’s top imports from Sri Lanka, according to the Trade Ministry.
