The free trade agreement with Indonesia has entered into force

Today, the free trade agreement between EFTA and Indonesia entered into force. More than 80 percent of Norway’s exports to Indonesia are now duty free according to a press release today from the Minestry of Trade, Industry and Fisheries.

– The free trade agreement between Norway and Indonesia gives Norwegian companies increased predictability, strengthened conditions and better market access in a large and growing market. Free trade agreements and international trade are important tools for achieving my goal of increasing exports by at least 50 percent by 2030. With this agreement, Norwegian companies will have better access to one of the world’s most populous markets, says Minister of Trade and Industry Jan Christian Vestre.

 

Many benefits for Norwegian business

The free trade agreement between EFTA and Indonesia provides new opportunities for exports, investment and trade. 80 percent of Norwegian goods can be exported duty-free to Indonesia from today. Customs duties on other goods will be gradually reduced.

The first tariff cut took place today and about 99 per cent of Norwegian exports receive zero tariff 12 years after the agreement enters into force. Of Norway’s 20 largest export products, 16 will receive zero customs duties from day one after the agreement enters into force, the rest after five or nine years. This concerns goods such as fertilizers, engines and turbines. For trade in seafood, the most important products will receive zero duty no later than 9 years after its entry into force.

The free trade agreement also limits the use of other types of trade barriers. Among other things, rules for veterinary and phytosanitary measures, import licensing procedures and trade facilitation. Overall, the agreement will thus reduce the trade bureaucracy and increase the predictability of Norwegian exports.

 

Predictability for service providers and investors

The free trade agreement provides predictable framework conditions for Norwegian service providers and investors with the possibility of majority ownership in a number of service sectors, including for energy-related services and telecommunications. 100 percent ownership is allowed for investments in sectors such as oil and gas and fish farming.

 

Separate chapter on employee rights and environmental considerations

The agreement contains a separate chapter on safeguarding employee rights and environmental considerations. The Free Trade Agreement contains operational provisions in which Norway and Indonesia agree to establish a high level of protection of the environment and labor standards, and to work to further improve the level of protection. The Parties recognize that economic development, social development and environmental protection are interdependent and supportive elements of sustainable development. The chapter has its own obligations on, among other things, employee rights, sustainable management of forest resources, fisheries and aquaculture as well as vegetable oils.

  • The free trade agreement between EFTA and Indonesia was signed in Jakarta in 2018. The negotiations lasted for a total of 8 years.
  • Norwegian exports to Indonesia in 2020 totaled NOK 1.87 billion.
  • Examples of some Norwegian companies with interests in Indonesia: Kongsberg, Hoegh LNG, DNV GL, Vow ASA, Lerøy, Orkla, Jotun, Yara, Nexans Norway.
  • Norway, together with the member states of the European Free Trade Association (EFTA), has entered into 30 free trade agreements with a total of 41 countries.
  • Norway enters into free trade agreements to ensure Norwegian companies the best possible market access with important trading partners. It is also important to ensure that the framework conditions for Norwegian business and industry in foreign markets are at least as good as for competitors in the EU and other countries. Bilateral free trade agreements have become increasingly important for Norwegian business and industry as a result of trade becoming more globalized.