Last October we reported on the progress of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) (see article here). Indonesia presents significant trade and investment opportunities for Australian farmers and businesses. With a population of over 260 million, some estimates see Indonesia as becoming the world’s fifth-largest economy by 2030.
From 05 July 2020, Australian exporters will start reaping the benefits of the IA-CEPA, as Australia has received formal notification that Indonesia has completed its domestic ratification processes. Federal Trade Minister Simon Birmingham welcomed the landmark deal this week after discussions with his Indonesian counterpart, Minister of Trade Agus Suparmanto.
Indonesia has been a growing market for Australian goods and services exporters. In 2018-19, total two-way trade in goods and services with Indonesia was worth A$17.8 billion, making it our 13th largest trading partner.
Under the deal, producers of grains, live cattle and meat, dairy and horticulture, and many other products will benefit from lower tariffs and improved access to Indonesian markets. It will also provide a major boost across a range of services sectors including education and training, tourism, financial, mining and energy, as well as providing new mechanisms to address non-tariff barriers.
After IA-CEPA officially enters into force on Sunday 05 July 2020, it will mean that 99% of Australian goods (by value) will enter Indonesia duty-free or under significantly improved preferential arrangements.
The economic stresses being caused by the Coronavirus pandemic in both Australia and Indonesia make this agreement even more important. With one in five jobs trade related, enhancing export opportunities for our farmers and businesses will be crucial to reducing job losses arising from the COVID-19 crisis and a critical part of our ultimate economic recovery.
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