Unions can’t be allowed to blow bridge with Indonesia

It would be an appalling tragedy if regressive trade union prejudices were to scupper the tortuously ­negotiated Australia-Indonesia trade agreement.

This is an important if still limited agreement which has both an economic and political purpose.

The unions are opposed to anything that looks like a modern trade agreement. The Investor State Dispute Settlement provisions they hate do little more than reinforce the rule of commercial law internationally. The labour market access arrangements are so minor it is ludicrous for the unions to object.

It looks like the unions detest free trade in principle and cannot abide anything happening in the labour market which they do not control. But this is an important deal, even if it does not compare with blockbusters like the FTA with the US or the big north Asian agreements.

Australia has been very well served by FTAs. They are one reason we are one of the richest nations in the world. But the political significance of this agreement is enormous. It has been under negotiation for many years, since before the election of the Coalition government. It was one of the many FTAs Labor could never finalise in government. It has had a rocky road. Elements of Indonesian politics objected to Scott Morrison considering transferring the Australian embassy in Israel from Tel Aviv to Jerusalem and the Australian decision to officially recognise West Jerusalem as Israel’s capital.

The Morrison government deserves great credit for sticking by good principle, making a useful and good change, while prudently managing the unreasonable reaction in Indonesia. Similarly, the government of President Joko Widodo has kept broad control of Indonesia’s reactions and, after a short delay, is ready to sign on.

It is hard work to create ballast in the Australia-Indonesia economic relationship. The two are competitive rather than complementary economies, both big commodity and energy exporters, for example. And in services, where there should be greater complementarity, the Indonesians are natural protectionists.

But Indonesia is important to us. We need a bigger economic relationship. Australia and Indonesia are star-crossed lovers. There are misunderstandings, the relationship goes up and down, trouble is never too far away.

The lack of powerful economic interests in both countries bringing their respective politics back to order on the relationship is one of the real problems.

It would be tragic if, after all this, we cannot get the enabling legislation through parliament and cannot ratify the agreement, because Labor is dependent on the unions and beholden to their antique and foolish prejudices.

And it would be a very big mark against Labor on a key piece of Asian diplomacy.