South Korea and Indonesia agreed on Wednesday in Jakarta to bolster economic cooperation, ranging from goods, service to investments.
South Korean trade minister Yoo Myung-hee and her Indonesian counterpart Enggartiasto Lukita announced that they have practically reached an agreement for a comprehensive economic partnership.
Under the agreement, South Korea will lift tariffs on nearly 96 percent of the items it buys from Indonesia, a scope that covers 97 percent of the value it currently imports.
Indonesia, for its part, will abolish tariffs on 93 percent of Korean goods or 97 percent of the amount it now buys.
In particular, tariffs imposed on major South Korean goods, including steel and car parts will be eliminated as soon as the agreement takes effect.
However, agricultural products will be exempt.
The trade ministry said Korea will immediately or in phases lift tariffs on Indonesian diesel, bunker-C oil, beer and more.
Korean exporters will also benefit from simpler rules on specifying the origins of their products.
In the service sector, both countries agreed to give more favorable conditions to online game companies, wholesalers, retailers and construction companies.
In those industries, Indonesia says it will ease limits on foreign investment.
Also, there will be more exchanges between researchers developing software and robots as well as more R&D projects.
A final version of the deal is expected within this year to take effect at a later date.
The deal is part of South Korean President Moon Jae-in's New Southern Policy with Indonesia which is the second-largest trader in ASEAN and has a population of nearly 270 million people.
The two sides resumed their talks after Indonesian President Joko Widodo visited Seoul last September.
Yoon Jung-min, Arirang News.