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Strategic measures in realizing the potentials of the Indonesia-Iran preferential agreement (II-PTA) amidst the us economic sanctions towards Iran

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Iran holds a prominent position as one of Indonesia's major trading partners within the Western Asia region, consistently resulting in a trade surplus favouring Indonesia. Following the subsided of the COVID-19 epidemic, there has been a continued upward trend in bilateral trade between the two countries. In 2022, the total trade volume reached US$ 256.4 million, resulting in a surplus of US$ 227.1 million for Indonesia.

In addition to serving as a destination market for Indonesia's main export commodities, Iran offers the potential to serve as an intermediary hub, facilitating connections between Indonesia and countries situated in South Asia, Central Asia, the Middle East and Europe. Iran has a significant strategic role in facilitating the connection between South Asia, Central Asia, the Middle East and Europe via the International North-South Transport Corridor (INSTC).

Given these great potentials, Indonesia has strengthened its economic cooperation with Iran by establishing the Indonesia-Iran Preferential Trade Agreement (II-PTA) in May 2023. Nevertheless, efforts to strengthen trade relations between Indonesia and Iran are frequently impeded by unilateral economic sanctions imposed by the United States of America on the Iranian Government (the Iran Sanctions Act/ISA). The imposition of economic sanctions has significantly constrained the opportunities for traders from Indonesia to engage in business transactions with Iran. This raises concerns that the goals of establishing the II-PTA will not be fully achieved if strategic measures to circumvent the US economic sanctions are not implemented.

This paper aims is to analyse several policy options that the Indonesian Government could pursue to maximize the benefits of II-PTA and to improve bilateral trade between Indonesia and Iran. The proposed policy recommendations entail improving sinergy among national entities and exploring new methods of transaction payment beyond those specified in the II-PTA.

Bilateral Trade Agreements, US Unilateral Economic Sanctions on Iran, Iran Sanctions, and Iranian Financial Sanctions Regulations

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Ketersediaan

2023-0055

Sesparlu 73-2023

Training Materials Repository

Tersedia

Informasi Detail

Judul Seri

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No. Panggil

Sesparlu 73-2023

Penerbit

Jakarta : Kementerian Luar Negeri., 2023

Deskripsi Fisik

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Bahasa

English

ISBN/ISSN

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Klasifikasi

NONE

Tipe Isi

text

Tipe Media

computer

Tipe Pembawa

online resource

Edisi

-

Subjek

-

Info Detail Spesifik

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Pernyataan Tanggungjawab

UPT Sekolah Staf dan Pimpinan Luar Negeri

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