Indonesia and Argentina are committed to increasing economic cooperation in several sectors ranging from trade, strategic industries, and agriculture. This was agreed at the bilateral meeting of the two country’ leaders, President Joko Widodo, and Argentine President Mauricio Macri, at the Bogor Presidential Palace, West Java, Wednesday (June 26).

Both leaders agreed to increase trade doubled from 2018 to 2021. The value of trade between the two countries in 2018 was US$ 1.7 billion (Rp24.14 trillion). This means that trade in 2021 is expected to reach $3.4 billion.

Based on government data, in 2018 Indonesia’ main export to Argentina namely footwear ($71.47million), rubber and rubber products ($46.79 million), as well as machinery and electrical equipment ($46,3 million).

Otherwise, the three main products imported from Argentina like oil cake from soybean oil ($934.98 million), cereals ($220 million), and cotton ($51.2 million). Overall, the country is one of the second largest trading partner of Indonesia for the South American region.

Total trade between the two countries in 2018 amounted to $1.68 billion, an increase of 17.96% compared to 2017. Meanwhile, Foreign Direct Investment from Argentina only $140,000.

However, Indonesia has a wide trade balance gap with Argentina. According to Trade Ministry data, Indonesia’s trade with Argentina last year reached $1.67 billion with a quite wide trade balance gap, $1.2 billion. Indonesia’s export to Argentina is $238.28 million while the import reached $1.44 billion.

During the first two months of 2019, the situation got worse. Indonesia-Argentina trade balance increased by 38.55% to $344,085, contributed by imports. On the other hand, Indonesia’ export fell by 28.86 percent to US$30,249. So the country recorded $283.586 trade deficit. The deficit is due to trade barriers and non-tariff rates, the issue of dumping, connectivity and language barrier.