Sign-off looms for Australia’s free-trade deal with Indonesia

A trade deal with Indonesia is expected to be sealed next month.

Trade Minister Simon Birmingham. Picture: AAP

A historic trade deal with Indonesia is expected to be sealed next month following delays sparked by a diplomatic spat over Australia’s Middle East ­policy shift.

Trade Minister Simon Birmingham said: “I’ve continued to have very constructive discussions with a number of Indonesian ministers in the last few months and am pleased to be finalising arrangements that we hope will achieve a March ­signing.”

On Thursday, Indonesian Trade Minister Lukita Enggartiasto said the “signing will be in March. We will stage a business forum along with the signing”.

The deal was scheduled to be signed in November but Indonesia delayed after the Morrison government gave Jakarta little notice of its announcement that it was considering moving the Australian embassy in Israel from Tel Aviv to Jerusalem. Indonesia does not recognise Israel and was hosting Palestinian Authority leaders when the review was announced.

Prime Minister Scott Morrison ultimately decided against the moving the embassy.

Australia and Indonesia have a history of bumpy relations and some analysts see the trade deal as aimed more at building stronger ties for strategic reasons than for economic benefits.

The economic benefits will, however, be substantial. For example, the trade in Australian boxed beef, offal and live cattle to Indonesia was worth $977 million in 2017-18.

Under the new deal, Indonesia will remove a 5 per cent tariff and offer duty-free access for 575,000 cattle in the first year, rising in each subsequent year.

Import quotes and licences have been a major irritant for Australian exporters and Indonesia will guarantee the automatic issue of import permits for live cattle, frozen beef, mutton, feed grains, rolled steel coil, citrus products, carrots and potatoes.

The deal will also give Australian universities and vocational training providers greater access to the Indonesian market.

Iman Pambagyo, the Indonesian Trade Ministry’s director-general for international trade negotiations, said the countries were still trying to settle on a date and location for the signing.