Succes and Profitability of B2B Indonesia and Mexico

Business-to-Business (B2B) is a business that focuses more on long-term business relationships. For when it is seen from the profit that is made of every item, the profit will be small. so that in order to generate a large profit, continuous – continuous cooperation between the parties involved must be carried out

Indonesia and Mexico have established a Business-to-Business (B2B) trade balance that marks the first time a B2B trade cooperation between the two countries. The cooperation is an effort by the Indonesian government to open opportunities for export of superior commodities owned by Indonesia that can help the recovery of its national economy in the present to the future. As a pilot project of trade balance cooperation with Mexico, Indonesia will export urea fertilizer, coal fertilizer, coconut shell charcoal, and various spices, namely cinnamon, nutmeg, and pepper. Meanwhile, Mexico offers sesame seeds and vegetable oils in the form of canola seeds and sunflowers and manufacturing products.

Diplomatic relations between Indonesia and Mexico began on 6 April 1953, immediately after Indonesia became independent from the Netherlands in 1945. In 1958, President Sukarno, who served as Indonesia's first president, 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, he further deepened communication between the two countries. For decades, Indonesia and Mexico had widespread cooperation, especially in scientific and technical fields by means of exchange of knowledge and technology. It helps advance together in sectors such as agriculture, energy, and information technology.

In general, over the years, Indonesia-Mexico bilateral relations have been good despite ups and downs, including differences in the paradigm of the head of state and program priorities, as well as the domestic conditions of each country.

In 2020, Indonesia and Mexico agreed to cooperate for economic recovery after the COVID-19 pandemic. Continued in 2022, these two countries are also cooperating in the field of Halal Product Guarantee (JPH) in hopes of encouraging economic recovery through industry and halal product trade. BPJH is also responsible for facilitating economic recovery through the development of halal industries such as food and beverage, fashion, cosmetics, pharmaceuticals, tourism, media, recreation, and financial services. With the continued increase in the value of bilateral trade, Indonesia and Mexico managed to create mutually beneficial cooperation. (Aqil Irham, 2022)

One impact was the improvement of trade relations between the two countries, which increased by 727% from 1993 to 2022. Through cross-sector cooperation, the two countries can continue to deepen their relationship to achieve common goals in promoting welfare and economic development in the Asian and American regions.

Indonesia's advantage in Indonesia-Mexico B2B cooperation
In the reciprocal cooperation of Business to Business (B2B), which is the first time that trade cooperation is carried out between Indonesia and Mexico. This is Indonesia's attempt to open up export opportunities so that it can help the national economy. This cooperation is set aside by the interests and goals of each country involved. This B2B shows an interdependence between the two countries and this B2B cooperation can show that there is an ability from the two countries to complement each other.  With this B2B cooperation, it can generate profits for Indonesia, namely:
1.     Indonesia and Mexico have a cooperation through the signing of the MoU which can make Indonesia have an increasing export opportunity in trade that is much larger than before in the future. In B2B cooperation companies can reach a wider market, namely through exports with potentially more customers than before.
2.     With greater trade between Indonesia and Mexico, there can be increased growth in the field of business expansion.  This has an effect on the increase in income in Indonesia and the recovery of the Indonesian national economy.
3.     The Business to Business cooperation conducted between Indonesia and Mexico made the expansion of the Indonesian export market so that it could provide marketing for new Indonesian products.
4.     The existence of B2B cooperation provides a marketing strategy for Indonesia to have a better competitive advantage.
5.     This also has an effect on Indonesia in maintaining a better export value for Indonesia to competitors.
6.     The B2B provides an expansion of Indonesia's export market so that this can provide Indonesia in saving the country's foreign exchange.
7.     The cooperation also contains the use of technology transfer and knowledge, so that it can help Indonesia improve its understanding of technology, which then makes Indonesia understand business development and exports.
8.     It can help Indonesia in optimal production, better product development, which is through interaction with business customers and also has an impact on better corporate management.

Success of B2B Indonesia and Mexico cooperation
The signing of a memorandum of understanding/MOU carried out between Indonesia and Mexico is one of the B2B successes achieved. This can open up opportunities for export and recovery of the national economy, encourage trade in the global value chain, improve relations and cooperation between Indonesia and Mexico. From the presence of B2B, there are several benefits, namely accelerating technology and knowledge transfer, the creation of balance of trade balance and payment, the expansion of employment opportunities. The implementation of trade balance is regulated in Law No. 7 of 2014 on Trade; Law No. 16 of 2012 on the Defense Industry; PP No. 76 of 2014 on the Mechanism of Trade Imbal in the Procurement of Alpalhankam from Foreign Countries; PP No. 29 of 2017 on the Method of Payment and Payment thereof Permenhan Number 30 of 2015 on Trade, Local Bodies, and Offset in the Procurement of Equipment and Security from Foreign Countries; and Permendag Number 01 of 2021 on Buying Imbal for the Procurement of Government Goods from Import. The presence of B2B, Indonesia and Mexico can establish import exports or cooperation:
1.     In 2020, Indonesia exported USD 154.9M of non-oil and non-oil imports of USD 127.3M. So Indonesia got a surplus of USD 27.6M
2.     Indonesia exports the most to machinery and electrical equipment products with an export value from Mexico in 2020 of USD 94M
3.     Indonesia exports many mineral fuel, mineral oil and products from distillation with an export value of USD 74.9M. This is up compared to the previous USD 19.3M
4.     Indonesia exported its rubber and articles to Mexico in 2020 amounting to USD 68.7M
A pilot project in which Indonesia offers urea fertilizer, coal fertilizer, spices such as cinnamon, nutmeg, pepper and coconut batok. Meanwhile, Mexico offers sesame seeds, vegetable oil, and other essential oils.