15/03/2012 (Jakarta Post) - Indonesia, Southeast Asia’s largest economy, and Brazil, South America’s largest economy, can boost their bilateral trade to US$35 billion over the next five to 10 years, given the size of the two countries’ respective economies, an Indonesian minister says.

Trade Minister Gita Wirjawan, who is leading an Indonesian business delegation on a four-day visit to South America, which will conclude on Thursday, said that considering the size of both economies, the bilateral trade figure was still far lower than its real potential, thus leaving enormous room for growth.

“Indonesia’s bilateral trade with Brazil was valued at around $3.6 billion in 2011. There are many opportunities to increase this figure considering the fact that the two countries’ combined GDP (gross domestic product) is around $3.5 trillion. We are aiming to boost trade to the level of $35 billion, or 1 percent of the combined GDP, supported by the complementarity between both countries,” Gita said in an email sent to The Jakarta Post.

Gita added that both countries could benefit from their huge markets and abundant natural resources in order to reach this goal.

“However, there are still restrictions, which do not reflect sensitivity of a ‘South-South’ strategy in the interests of both countries, and this needs to be addressed,” he said.

Indonesia has seen its products face various barriers when trying to access the Brazilian market of 195 million people in recent years, including anti-dumping measures, anti-dumping circumvention measures and non-automatic licensing, as well as charges on various export goods, such as shoes, yarn, glassware and automotive spare parts.

According to Gita, Indonesia expects to increase exports of a wide range of products to Brazil including rubber, footwear, textiles and textile products, palm oil and cocoa beans, as well as importing various agricultural and cattle products.

The trade minister accompanied 17 business delegates from various sectors, including agriculture, manufacturing and the service industry, to meet Brazilian business heads, including aircraft producer Embraer, on Tuesday. The delegation will conduct similar activities in neighboring countries, Peru and Chile.

The first South American trade mission is part of the government’s move to expand its penetration into the non-traditional market, covering South America, the Middle East and Africa, amid escalating worldwide slowdown, which has begun to affect the country’s exports.

In 2010, Brazil was Indonesia’s 19th-largest export destination and its 13th-largest source of imports, according to data at the Trade Ministry. In contrast to this, Indonesia was only the 30th-largest export destination for Brazil and the 27th-largest importer of Brazilian goods.

Indonesia exports various commodities and goods to Brazil, including natural rubber, crude palm oil (CPO), paper, electronics and automotive spare parts, while it imports soybean oil, sugar cane, cotton, iron and aircraft from Brazil.

Trade Ministry data also reveals that bilateral trade amounted to $3.6 billion last year, up 11.93 percent from 2010, with Indonesia exporting $1.7 billion, up 22.31 percent from the previous year, and imported $1.8 billion worth of goods, a 25.3 percent increase from 2010. This resulted in a deficit in Indonesia’s trade balance of $163.2 million.