How Indonesia can take advantage of IA-CEPA

Michelle Limenta
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PREMIUM

Jakarta / Thu, July 9, 2020 / 09:40 am

How Indonesia can take advantage of IA-CEPA

Nothing but beef: A customer looks at cuts of Australian beef at a supermarket chain in Jakarta on June 1, 2011. Imports of Australian beef will be made easier after the Indonesia-Australia Comprehensive Economic Partnership Agreement came into force on July 5, 2020. (AFP/Bay Ismoyo)

The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), which took effect on July 5, 2020 is expected to be a milestone in unlocking and realizing the vast potential of bilateral economic partnership and commercially meaningful outcomes between the two countries as currently their bilateral trade is considerably low, despite their close geographical proximity. For instance, Indonesia’s Trade Ministry recorded total trade between Indonesia and Australia of around US$7.8 billion in 2019. This value is miniscule compared with China’s $73 billion total trade with Indonesia in the same year. Under the IA-CEPA agreement both parties will enjoy certain preferential market access. For instance, Indonesian exports such as automotive products, timber, textiles, electronics and communication tools are expected to increase as Australia will eliminate the rem...