Coronavirus: Indonesia free-trade deal to ensure farmers drive our economic fightback
A landmark free-trade deal with Indonesia will come into force on July 5 after it was ratified by Jakarta.
A landmark free-trade deal with Indonesia will come into force on July 5 after it was ratified by Jakarta allowing 99 per cent of Australian goods exports to enter the country either duty-free or under improved arrangements.
The government says the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) will deliver major benefits to farmers while expanding the two-way investment relationship.
Business Council of Australia chief executive Jennifer Westacott said Indonesia’s decision to ratify the deal would create new jobs and build a stronger recovery for both nations as they emerged from the coronavirus pandemic.
Under the agreement, Australian wheat producers will be able to export up to 500,000 tonnes of wheat, barley and sorghum to Indonesia each year, tariff-free.
There will be an immediate halving of the tariff on frozen beef and sheep meat from 5 per cent to 2.5 per cent before elimination over five years. Australian steel producers are to receive annual duty-free access for 250,000 tonnes of rolled steel coil, with news of the deal coinciding with Australian Bureau of Statistics data showing Australia’s trade surplus more than doubled in March to a record $10.6bn.
Trade Minister Simon Birmingham said after discussions with Indonesian counterpart Agus Suparmanto, the benefits of the agreement would begin flowing from July 5.
“Securing a trade agreement with Indonesia has been a longstanding objective of our government to further strengthen the strategic partnership between our nations and … expand the choices available for Australian exporters,” Senator Birmingham said.
“This is the most comprehensive bilateral trade agreement Indonesia has ever signed, and will give a competitive edge to Australian exporters, particularly at a time when many are doing it tough as a result of the COVID-19 crisis.”
Ms Westacott told The Australian trade would be “crucial to firing up Australia’s economy and creating new jobs in the wake of the COVID-19 pandemic”.
“By some estimates, Indonesia is set to be the world’s fifth-largest economy by 2030. This agreement locks in bilateral trade and investment so that as Indonesia’s economy grows, Australia prospers,” she said. “In particular, this … will help supercharge growth in our regions by opening new markets for Australian products in agriculture such as livestock feed and industrial products like steel.”
Senator Birmingham said the economic stresses caused by COVID-19 meant the deal offered a new opportunity for growth and investment across both nations. “With a population of over 260 million and one of the fastest-growing economies … Indonesia presents significant trade and investment opportunities for Australian farmers and businesses.”
The deal will also provide more certainty and guaranteed levels of Australian ownership in key service areas including vocational education, health and aged care, tourism, professional services, telecommunications, energy, mining transport and construction.
Universities stand to benefit, with Australian-owned vocational training providers free to partner with Indonesian business.
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