History and Background of International Business-to-Business (B2B) Cooperation Between Indonesia and Mexico
Diplomatic relations between Indonesia and Mexico began on 6 April 1953, shortly after Indonesia gained independence from the Netherlands in 1945. In 1958, President Soekarno, who served as the first president of Indonesia, came to visit Mexico, and marked an important step in strengthening bilateral relations between Indonesia and Mexico. In 1962, when Mexican President Adolfo Lopez Mateos visited Indonesia, and further deepened communication between the two countries. For decades, Indonesia and Mexico have established extensive cooperation, mainly in the scientific and technical fields through the exchange of knowledge and technology. It helps joint progress in sectors like agriculture, energy, and information technology.
Generally speaking, over the years, Indonesian-Mexican bilateral relations have gone well despite recessions, inter alia due to differences in heads of state paradigms and programme priorities, as well as domestic conditions in each country. During the time of the first President of Indonesia, during the reign of President Soekarno, since the opening of diplomatic relations, Indonesia has a clear position and sees Mexico as a strategic country to be a partner, hub, and bridge in the Latin American region.
Indonesia's close ties with the Mexican government and several other Latin American countries such as Argentina, Uruguay, and Cuba turned out to be a breakthrough for President Soekarno as part of his foreign political agenda. Mr. Atmono Suryo, who served at the Mexican CCRI in 1955, stated that Indonesian-Mexican bilateral relations should be seen as breakthroughs after the independence of the Republic of Indonesia. As an independent country, Indonesia wants to be free from Dutch interference and to uphold the opening of the 1945 UUD called the 1945 Basic Law. (Pramudyo, 2004).
Art, literature, and cultural exchanges are also a fundamental part of bilateral relations, with frequently organized cultural events, art exhibitions, and performances to enrich public understanding of cultural diversity. In the economic sphere, bilateral trade growth reflects a commitment to broadening economic cooperation, with foreign direct investment being a key factor in strengthening economic ties between the two countries.
As members of the G20, Indonesia and Mexico have significant roles in the international forum, the two countries are committed to working together to address global challenges such as climate change, food security, and sustainable development. And it is worth noting, Mexico also provides scholarships for postgraduate studies for Indonesians.
High-level meetings between the two countries, such as Mexican President Enrique Pea Nieto's visit to Bali in order to attend the Asia-Pacific Economic Cooperation (APEC) Summit in 2013. As Mexican Ambassador Alvarez said on the occasion of the 70th anniversary of the country's cooperation relations, "The relations between the two countries are built on mutual respect, solidarity, cooperation, and friendship." The bilateral relations are continuously strengthened through various initiatives, including the celebration of 70 years of diplomatic relations, guest lectures, and preparations to commemorate the 70 year of Indonesian-Mexican bilateral ties.
By 2020, Indonesia and Mexico agreed to work together to recover from the COVID-19 pandemic. Renewed in 2022, the two countries are also cooperating in the field of Halal Product Assurance (JPH) in the hope of boosting economic recovery efforts through industry and trade in halal products. BPJH is also tasked with facilitating the recovery of the economy through the development of halal industries such as food and beverages, fashion, cosmetics, pharmacy, tourism, media, recreation, and financial services. With the growing value of bilateral trade, Indonesia and Mexico have succeeded in creating mutually beneficial cooperation. (Aqil Irham, 2022) One impact is the increase in trade relations between the two countries, whose value rose to 727% from 1993 to 2022. Through cross-sectoral cooperation, the two countries can continue to deepen their relations to common goals in advancing prosperity and economic development in the Asian and American regions. (Armando G Alvarez, 2023)
Business-to-Business (B2B) is a business that is more focused on long-term business relationships. For if you look at the profits of every commodity (item), then the profit will be calculated small, so in order to generate a large value of profit, it will have to do a continuous cooperation between the parties involved. This business can be run by creating a special agreement based on the business interests of each of the parties working together. Incorporating Business-to-Business (B2B) cooperation with other countries is an act taken by a country to some of its interests, such as enhancing bilateral relations and cooperation, as well as increasing exports of superior commodities that can boost the economy and income of the country.a
Indonesia and Mexico have established a Business-to-Business (B2B) trade partnership that marks the first B2B trade cooperation between the two countries. The cooperation is an attempt by the Indonesian government to open up opportunities for the export of Indonesia's superior commodities that can help the recovery of its national economy in the present and future. As a pilot project of the trade partnership with Mexico, Indonesia will export urea fertilizers, coal fertilizer, coconut coal, as well as various spices, namely coriander, palate, and peaches. Meanwhile, Mexico offers wheat seeds and vegetable oils in the form of cannola and sunflower seeds as well as manufactured products. The Indonesian Ministry of Trade facilitated the signing of a memorandum of understanding (MoU) on cooperation in a B2B trade imbal scheme between domestic companies and companies in Mexico. The Indonesian government continues to make new breakthroughs in opening up export opportunities to help the national economic recovery. Indonesia and Mexico have great potential for trade cooperation, and several Mexican companies have participated in the Trade Expo Indonesia (TEI) event and found their Indonesian partners. By 2020, there are three agreements signed by the Mexican institution with the Indonesian company. According to the Indonesian Ambassador to Mexico, trade between Mexico and Indonesia has increased significantly from USD 105 million in 2019 to USD 1,605 billion in 2022, marking the highest recorded figure in the history of bilateral relations between the two countries. Mexico has tried to enter the Indonesian market in the agri-food sector, and there is a successful case of a Mexican company making products in that Asian country and importing to Mexico.
Trade Expo Indonesia (TEI) is the largest B2B exhibition in Indonesia, and this year, Indonesia will resume its live exhibitions in October. The exhibition offers a good platform to expand both markets and strengthen trade between the two countries. According to Jorge Lpez, Vice President of COMCE, Indonesia is a market that Mexico should pay attention to, as it has more than 270 million inhabitants, more than twice the population of Mexico. Lpez stated that Indonesian companies showed that a well-organized logistics strategy can yield good results. In conclusion, Indonesia and Mexico have established a B2B trade partnership, and the two countries have great potential for trade cooperation. The TEI event offers a good platform to expand both markets and strengthen trade between the two countries.
Implementation of Interdependence Theory
The theory of interdependence is a theory that emerges from a liberal perspective. Interdependence is a dependency caused by cooperation between two or more actors due to a sense of mutual need. (Indrawan, 2012).
According to Robert O. Keohane and Joseph S. Nye, simply the theory of interdependence can be understood as a mutual relationship or mutual dependency in international relations. In the theory of interdependence, one party will not be able to satisfy its own needs fully, therefore it requires the role of the other party as a complement to carry out an interaction. Interdependence considers that cooperation between international actors has existed for a long time in international relations. Increased interdependence between states will reduce the potential of these countries to engage in armed conflict. According to the interdependent liberals, modernization is a process of increasing the level and coverage of inter-national interdependency, resulting in wider cooperation. (Robert Jackson & Georg Sorensen, 2014).