Indonesia-Australia push economic ties, trade deal soon
(Recasts after news conference between leaders, changes
By Agustinus Beo Da Costa
BOGOR, Indonesia, Aug 31 (Reuters) - The leaders of
Indonesia and Australia on Friday concluded talks on an economic
partnership to boost trade in areas ranging from cars to cattle,
as well as relaxing controls on investing in services such as
education in the Southeast Asian nation.
Australia's new prime minister, Scott Morrison, met
President Joko Widodo at the Bogor palace south of Jakarta on
his first overseas trip since taking office last week after
winning an internal party leadership challenge.
"Indonesia has the honour of being the first country visited
by the prime minister. This can be interpreted as a strong
commitment by the Australian prime minister to build strong
relations," Widodo told a joint news conference.
Morrison said the neighbours were already close partners in
the security field, "but it is the economic relationship where
we have committed today to take another big step".
He said negotiations on the Indonesia-Australia Comprehensive
Economic Partnership (IA-CEPA) had been successfully concluded
and the accord should be signed by the end of the year.
The Asian neighbours have been in prolonged trade talks
since early in the decade, with diplomatic tensions between the
two sides occasionally stalling the negotiations.
Although Indonesia is Southeast Asia's largest economy and
Australia the 13th largest in the world, their trading
relationship is limited and neither count the other as a top
Boosting exports, including by securing market access for
Indonesian products through FTAs, is also a priority for
Widodo's government as it tries to put a floor under the
country's falling rupiah currency.
Australia was the 14th-biggest buyer of Indonesian exports
in 2017, while Indonesia is Australia's 13th-largest trading
partner, with Australia putting two-way trade at A$16.4 billion
($12 billion) in 2016-2017.
Only some detail on the accord were released but some 90
percent of Australian goods exported to Indonesia, by value,
would enter duty free or "under significantly improved
arrangements" under the deal, Australian Trade Minister Simon
Birmingham said earlier on Friday, adding that was up from 85
percent under previous deals.
Birmingham listed frozen meats, live cattle, feed grains,
dairy, citrus and rolled steel as examples of Australian
products destined for favourable treatment under the deal.
Indonesia's maritime affairs minister Luhut Pandjaitan also
told reporters the agreement covered Australian agricultural
imports including cattle but "both parties must feel the
On Thursday, an Indonesian foreign ministry official said
the agreement would free up Indonesia's university sector for
Australian investors, allowing up to 67 percent foreign
ownership. Foreign investors are currently barred from majority
ownership in an Indonesian university
The visit to Jakarta is the first for Morrison and
Birmingham in their respective new roles as prime minister and
trade minister, since Malcolm Turnbull was ousted in a party
leadership battle last week.
Relations between the two countries had warmed under
Turnbull, who appeared to enjoy a good rapport with Widodo.
($1 = 1.3765 Australian dollars)
(Additional reporting by Gayatri Suroyo and Tom Westbrook in
Writing by Ed Davies
Editing by Simon Cameron-Moore)
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