Somalia signed a trade agreement with Indonesia on January 18 in an attempt to boost its struggling textile and construction industries.

Bilateral trade fell to just $3.1 million in 2009 compared with $8 million in 2008 and it is hoped the new agreement will prompt a turnaround this year.

Under the trade deal, Indonesia will import raw textile materials including cotton from Somalia tariff free. The finished goods will be produced in Indonesia and will then be exported back to Somali on a tariff-free basis. According to reports, there is healthy demand for Indonesian textiles in Somalia, despite its small population.

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