Indonesia and Peru have today signed a free trade agreement (FTA) to strengthen economic ties and investment, amidst rising tariffs and trade barriers worldwide.
The deal was finalised in Jakarta during Peruvian President Dina Boluarte’s state visit – the first by a Peruvian president since formal ties were established in 1975.
Bilateral trade between the nations totalled $444.4 million in 2023, down from $554.2 million the previous year. Indonesia maintained a trade surplus of $290.4 million, driven primarily by exports of vehicles, footwear, and biodiesel.
2024 figures show that Indonesian exports to Peru were worth $329.4 million, while Peruvian exports to Indonesia reached $149.6 million.
Under the agreement, Peru has secured access to the Indonesian market for blueberries, which will supplement its existing exports of quinoa and grapes.
The partnership encompasses cooperation in defence, mining, energy transition, fisheries, and food security. Both leaders also signed agreements targeting narcotics trafficking and illegal trade.
Indonesia has been pushing towards joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Peru is already a member.
Indonesia, Southeast Asia’s largest economy, is Peru’s sixth-largest trading partner in Asia, whilst Peru ranks fourth among Indonesia’s main export destinations in South America and the Caribbean.
The agreement sits within a range of new bilateral agreements which have been forming in light of US President Donald Trump’s barrage of tariffs in recent weeks. Peru is currently subject to a baseline 10% tariff from the US, their second-biggest trading partner after China.
Meanwhile, Indonesia and the US came to a trade agreement on 22 July that will provide the US access to over 99% of Indonesian markets and impose a 19% reciprocal tariff on Indonesian exports. This deal heavily favours US exporters in agriculture, manufacturing, and digital trade sectors, with Indonesia making broad concessions on regulations, data flows, and market access.
Indonesia has been seeking to diversify its trade partners internationally. On 13 July, the country agreed to remove trade barriers with the EU; earlier this year, it promoted an FTA with the Gulf Cooperation Council (GCC).
Indonesia’s Trade Minister Budi Santoso described the pact with Peru as “a potential gateway for Indonesian goods and services to enter markets in Central and South America,” as Jakarta seeks to strengthen its presence across the region.
