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Jakarta Post

Bilateral treaty: Can we benefit from IA-CEPA?

  • Muhammad Iqbal Hasan


Jakarta   /   Mon, March 11, 2019   /  01:07 pm
Bilateral treaty: Can we benefit from IA-CEPA? Art of the deal: Trade Minister Enggartiasto Lukita (right) and his Australian counterpart Simon Birmingham hold documents after signing a trade deal in Jakarta on Monday. Indonesia and Australia signed a long-awaited deal after months of diplomatic tension over Canberra’s contentious plan to move its embassy to Jerusalem. (AFP/Adek Berry)

Indonesia has just signed a comprehensive economic partnership agreement (CEPA) with Australia, which is a treaty that covers trade, investment and other areas of cooperation. As soon as this treaty, which is officially called the Indonesia-Australia CEPA (IA-CEPA), is ratified and enters into force, the two countries will start a new era in their economic relationship. It is understood that the correlation between CEPA and foreign investment flows is still a contentious issue. Some researchers have concluded that there is no significant correlation between the two while others concluded otherwise. This article will focus on the scenario of a positive impact of the cooperation. Indonesia and Australia actually have already entered similar treaties, with both countries being signatories to the ASEAN-Australia-New Zealand FTA (AANZFTA). Unfortunately, although AANZFTA is already i...

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.