Supply Chain News - Australia and Indonesia Signs A New Trade Agreement

Supply Chain News - Australia and Indonesia Signs A New Trade Agreement

Australia and Indonesia have signed, on the 4th of March, the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), starting a new chapter of cooperation and deeper economic management in one of our most important relationships.

australia indonesia import export

Photo: Presidential Office/Laily Rachev

The Australian Minister for Trade, Tourism and Investment, Senator the Hon Simon Birmingham, signed the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) with Indonesian Minister for Trade H.E Enggartiasto Lukita, in Jakarta, Indonesia, on 4 March 2019. This agreement launches a new chapter in economic relations between Australia and Indonesia.

Australia's two-way trade with Indonesia was worth $16.8 billion in 2017-18, making Indonesia our 13th largest trading partner.

Bolstering economic ties between our nations will create new trade opportunities for Australian and Indonesian businesses, boost two-way investment and increase prosperity in both countries.

With a population of 270 million and high levels of economic growth, Indonesia is on track to become one of the world’s largest economies. This makes the strengthening of our ties both strategically and economically important.

This is a great deal for Australia: it means that 99 per cent of Australian goods (by value) will enter Indonesia duty-free or under significantly improved preferential arrangements by 2020.

A stronger economic partnership with Indonesia will provide a major boost for Australian farmers. Under the agreement, 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.

For example, Australian grain growers will be able to export feed grains into Indonesia tariff free, building on our substantial milling wheat exports.

IA-CEPA will also support Australian manufacturing in areas such as steel, copper and plastics. Additionally, Australian service industries including health, mining, telecommunications, tourism and education will have greater access to Indonesia’s growing economy.

The Agreement guarantees that majority Australian-owned businesses can take advantage of the exciting investment opportunities available in Indonesia’s rapidly expanding economy.

This includes providing vocational education to Indonesia’s growing population through work training programs, establishing tourism-related businesses to serve the needs of Indonesia’s burgeoning tourist industry, running private hospitals to provide world-class healthcare, and participating in the construction of Indonesia’s growing list of infrastructure projects.

The mutual benefits from this Agreement are critical. Australia wants not only a stronger Australia but also a stronger Indonesia, knowing that economic growth enhances security and stability. By reducing trade barriers, we can grow both of our economies and by encouraging trade and investment in areas of high potential for Indonesia, we can build greater capacity for its continued successful development.

The signing of this Agreement is another demonstration of the Morrison Government’s commitment to delivering a stronger economy for Australians through open trade and investment. This will guarantee the essential services all Australians rely on.

This Agreement with Indonesia builds on the multitude of trade deals our government has struck, which led Australia registering a record $22.2 billion trade surplus in 2018.

Whale has extensive trade dealings and relationships with Indonesia, if you are interested in a consultation to see how this agreement may affect your business, get in touch with our team.


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