Analysis of Trade in Goods between Indonesia and South Korea on Cooperation Forum IKCEPA

Indonesia Korea Comprehensive Economic Cooperation Partnership (IKCEPA) arises from the desire of both countries to boost trade performance and make the free trade agreement more comprehensive. CEPA agreement with South Korea has targeted the reduction and elimination of tariffs that cover more products and services. This study analyzed the relationship between Indonesia merchandise trade cooperation with South Korea. Besides, look at the potential of the Korean market for goods exports from Indonesia featured. To deepen the study simple equilibrium analysis is used to analyze the potential of the South Korean market for goods exports Indonesia. The analysis showed that after the implementation of AKFTA in 2007, Indonesia merchandise trade performance by sector turned out to have an average growth of imports by 21.36 percent, higher than the average export growth of 8.19 percent. There are some items which have the potential to become a mainstay of exports to Korea that includes textiles, wood processing, manufacturing goods such as spare parts of household appliances, bicycles and others. Likewise, there are some agricultural products such as pineapple, guava, and animals such as freshwater fish, crabs, cuttlefish and others. However, the export of these items to South Korea is still hampered by their tariff barriers. Forum IKCEPA cooperation can be a bridge to fill the gap between the two countries for tariff reduction, market acces and an increase in exports of both countries.