Indonesia, Australia sign partnership in bid to boost trade, services
* Indonesia business, Australian farmers welcome trade
* Aim is to ratify deal before end of year - Indonesian
* Two-way trade totalled $8.6 bln in 2018 - joint statement
* Deal also covers services including opening up education
(Adds agreement details, quotes)
By Bernadette Christina Munthe and Kanupriya Kapoor
JAKARTA, March 4 (Reuters) - Indonesia and Australia on
Monday signed an economic partnership agreement aimed at
stepping up trade and investment between them in areas ranging
from cattle to education and cars to wheat.
Though neighbours, the two countries are not top trade
partners and the deal has been welcomed by Australian farmers
looking to ship more agricultural commodities into Southeast
Asia's biggest economy, as well as by Indonesian companies
producing footwear and textiles.
In Jakarta, Indonesian Trade Minister Enggartiasto Lukita
and Australian Trade Minister Simon Birmingham signed the deal
following completion of talks that started early in the decade
and occasionally were stalled by diplomatic tension.
Following Monday's signing, the two governments "will work
on an expedited ratification process toward the entry into force
of the agreement", a joint statement said.
The Indonesia-Australia Comprehensive Economic Partnership
Agreement (CEPA) will eliminate all Australian tariffs on
imports from Indonesia, while 94 percent of Indonesian tariffs
will be gradually removed, it said.
Lukita said he hoped the agreement will be ratified before
the end of this year.
Negotiations were concluded in August and the deal had been
due to be signed by the end of 2018, but diplomatic friction
over Middle East policy delayed the signing.
Australia’s recognition of West Jerusalem as Israel’s
capital strained relations with Indonesia, which is the world’s
biggest Muslim-majority country and supports a two-state
solution to the Israel-Palestinian dispute.
The trade deal "is a good step forward for the
important bilateral relationship between these G20 nations,
which has too often suffered because of political rows," said
Ben Bland, director of the Southeast Asia project at the Lowy
Institute in Sydney.
Monday's joint statement cited Indonesia statistics saying
that their two-way trade totalled $8.6 billion in 2018.
Australia has said Indonesia is its 13th largest trade partner.
Rosan Roeslani, chairman of the Indonesian Chamber of
Commerce and Industry (KADIN), said he expected his country's
textile and footwear industries to benefit the most from the
The CEPA covers not just free trade in goods, but also
services such as opening up investment in Indonesia’s university
sector to allow up to 67 percent foreign ownership once a
so-called negative investment list - showing what areas
foreigners cannot enter - is revised.
The deal should also open up ownership in Indonesia of
hotels, power plants and companies providing mining services,
according to the Australian foreign ministry's website.
Under the agreement, Australia will be able to export to
Indonesia 575,000 head of cattle in the first year of the deal
duty free, it said. At present, there is a 5 percent duty.
Indonesia is already the largest buyer of Australian wheat,
purchasing A$950 million in 2017-2018, while beef exports were
around A$800 million last year and sugar exports $181 million.
Andrew Weidemann, a grain farmer in the Australian state of
Victoria, said the agreement was a rare bight spot for an
industry crushed by prolonged drought on the east coast.
"It's a win-win for Australian grain and Australian farmers
in general and the economy," said Weidemann.
(Additional reporting by Fanny Potkin and Colin Packham in
SYDNEY; Writing by Ed Davies; Editing by Richard Borsuk)
First Published: 2019-03-04 05:34:08
Updated 2019-03-04 07:53:00
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