Korea-Indonesia Sign AEO MRA to Ease Non-Tariff Barriers... Expansion of New Southern Belt

On the 6th, Noh Seok-hwan, Commissioner of the Korea Customs Service (first on the right), met with Heru Pambudi, Commissioner of the Indonesian Customs Service (first on the left), in Seoul to discuss cooperation measures to support export companies of both countries. Provided by the Korea Customs Service



Left: Heru Pambudi, Commissioner of the Indonesian Customs Service Right: Noh Seok-hwan, Commissioner of the Korea Customs Service

[Asia Economy (Daejeon) Reporter Jeong Il-woong] The non-tariff barriers between South Korea and Indonesia (hereinafter referred to as Inni) will be eased. This development allows South Korea to anticipate an expansion of the New Southern Belt.

On the 6th, the Korea Customs Service held the 'Korea-Inni Customs Cooperation Meeting' in Seoul and announced the signing of a Mutual Recognition Arrangement for Authorized Economic Operators (hereinafter AEO MRA) between the two countries.

With the signing of the AEO MRA, domestic export companies will receive benefits in customs procedures such as expedited clearance and reduced import inspection rates in Inni. This effectively lowers the non-tariff barriers experienced by companies.

In particular, Inni is regarded as one of the New Southern countries, which are considered new growth engines of the global economy. According to an OECD analysis, New Southern countries are expected to account for 59% of the world's middle-class consumption by 2030, indicating high growth potential.

Accordingly, the government is currently focusing on the New Southern Policy and expanding the Korean Peninsula's economic sphere of influence to New Southern countries.

Moreover, Inni is the world's fourth most populous country and a resource-rich nation, accounting for 36.8% of ASEAN's regional Gross Domestic Product (GDP), making it a large domestic market with significant potential.

Considering this, the Korea Customs Service emphasizes that the signing of the AEO MRA between South Korea and Inni is meaningful as it will serve as a bridge for Korean export companies to penetrate the Indonesian market and aligns with the government's New Southern Policy.

Kim Jong-ho, Director of the Customs Examination Policy Division at the Korea Customs Service, stated, "South Korea experienced a precedent in 2018 by signing an AEO MRA with China, which lowered non-tariff barriers for domestic import and export companies (such as a 75% reduction in import inspection rates and a 79% reduction in customs clearance time). The Korea Customs Service plans to continue strengthening strategic customs diplomacy with each country so that domestic companies can freely enter New Southern and New Northern markets."

*Authorized Economic Operator (AEO) = A system where the Korea Customs Service certifies excellent companies that meet certain safety management standards and other requirements, allowing these companies to enjoy benefits such as expedited customs clearance.

*Mutual Recognition Arrangement (MRA) = A mutual agreement between customs authorities to grant the same trade benefits to the other country's AEO companies as to their own AEO companies.

This content was produced with the assistance of AI translation services.