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Indonesia, Iran aim to finalise preferential trade agreement

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Iranian flagged MT Horse and Panamanian flagged MT Frea are seized by the Indonesian Maritime Security Agency (Bakamla) for illegal ship-to-ship oil transfer on waters off Pontianak, West Kalimantan, on January 24. BAKAMLA/THE JAKARTA POST

Indonesia, Iran aim to finalise preferential trade agreement

Indonesia and Iran highlighted the need to finalise a trade agreement between the two countries during the visit of Iranian foreign minister Mohammad Javad Zarif to Jakarta on April 19.

Iran’s top diplomat met his Indonesian counterpart Retno Marsudi at her Pejambon office, where they touched base on various bilateral issues following the celebration of 70 years of diplomatic relations last year.
During the meeting, Zarif expressed his side's readiness to continue negotiations on the trade deal.

“Expressing pleasure with the growing level of trade ties between the two countries, Zarif referred to the huge capacity for bilateral business relations, and highlighted the necessity of expediting the finalisation of a preferential trade agreement between the two countries,” the Iranian foreign ministry said in a statement published on its website.

Indonesia and Iran have been talking about having a trade agreement for several years now, with the last round of negotiations happening in 2017.

Trade volume between the two countries rose sharply last year by 52 per cent to $215 million from $141.6 million in 2019 despite pandemic pressures, ministry data show. Indonesia sells natural rubber, palm oil, paper, tyres and chemical products to Iran.

Meanwhile, Indonesia imports steel, petrochemicals, minerals and raw materials for synthetic fibre from Iran.

During April 19’s meeting, the Iranian official also praised Jakarta's “principled stances” at the UN Security Council (UNSC) in defence of maintaining the Iran nuclear deal known as the Joint Comprehensive Plan of Action (JCPOA) and implementing UNSC Resolution 2231.

The comment was a snub on then-US state secretary Mike Pompeo, who triggered a 30-day process in August last year to re-impose all international sanctions on Iran – known as the snapback – by lodging a complaint with the UNSC accusing Iran of breaching the 2015 nuclear deal.

Then-Indonesian ambassador to the UN Dian Triansyah Djani, who was the council president for August, said he was "not in the position to take further action" because the 13 other council members expressed their opposition.

Zarif’s visit to Jakarta also comes three months after Indonesian authorities seized the Iranian-flagged tanker MT Horse and a Panamanian-flagged tanker, MT Freya.

The ships were suspected of a variety of violations, including illegally transferring fuel at sea, oil spillage, failure to fly national flags for identification purposes, concealing their vessel names, shutting off their identification systems and anchoring illegally.

Indonesia’s Maritime Security Agency (Bakamla) caught the Iranian flagged MT Horse and Panamanian flagged MT Freya “red-handed” as the two tankers were conducting ship-to-ship oil transfer operations, known as transhipment, after having turned off their automatic identification system (AIS), lowered their flags and covered up their vessels’ names.

Bakamla insists that its investigation was focused on the violations within Indonesian territorial waters and refused to comment on the US sanctions on Iran’s energy sector.

The two foreign ministries did not indicate whether the ministers discussed the seizure of the tankers.

Indonesia and Iran also exchanged views on the latest developments in the Afghanistan peace process. The US has said it will withdraw its troops from Afghanistan by the 20-year anniversary of the 9/11 attacks that sparked the US “War on Terror”.

During his visit, Zarif also made a courtesy call on Indonesian President Joko “Jokowi” Widodo.



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