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Australia, Indonesia agree to conclude IA-CEPA talks by end of year
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President Joko "Jokowi" Widodo and his counterpart Prime Minister Malcolm Turnbull speak after an event on Feb. 26, the last day of Jokowi's first state visit to Australia (Courtesy of/The Presidential Office )
T
he Australian and Indonesian governments have agreed to conclude the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) by the end of this year.
“We agree with the Indonesian government to conclude the negotiations in December. We will do everything to reach the target,” said Steven Barraclough, minister-counselor of economics, investment and infrastructure at the Australian Embassy in Jakarta, on Wednesday.
Barraclough said the talks should explore profitable businesses and mutual interests for both countries. He said, for example, that Australian companies might develop their factories in Indonesia to benefit from low production costs.
“The production cost is very high, whereas Indonesia’s production costs are low. Therefore, we can make an agreement to produce Australians goods and sell them to a third party,” Steven added.
The IA-CEPA is designed to create a framework for closer economic engagement between the two countries, creating new opportunities and markets for Australian and Indonesian exporters.
The visit of President Joko “Jokowi” Widodo to Australia in February opened the way for further discussions over the IA-CEPA. During the visit, Jokowi promised to abolish or cut a number of tariff and non-tariff barriers.
The Indonesian pesticides and herbicides industry has already benefitted from the talks as Australia has pledged to lower its tariffs on Indonesian products in response to Indonesia’s removal of a tariff on Australian sugar.
According to the Australian Department of Foreign Affairs and Trade, two-way trade between the two countries reached A$15.3 billion (US$11.7 billion) in 2016. (bbn)
The writer is an intern at The Jakarta Post.
