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Red tape keeping IA-CEPA from facilitating RI-Australia free trade
If left unsolved, this could discourage foreign direct investment (FDI) as it extends the timelines beyond what investors are willing to accept while increasing the risks to their capital.
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Oceanic neighbors: Australian Prime Minister Anthony Albanese (left) and Indonesian President Joko “Jokowi” Widodo share a light moment on Sept. 7, 2023, at the ASEAN-Australia Summit 2023 in Jakarta. (Kompas/Adryan Yoga Paramadwya)
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free trade agreement between Indonesia and Australia has yet to fully deliver its promise of booming bilateral trade and investment four years after it began, with businesses blaming red tape for the difficulties they face in taking advantage of the pact, which is known as the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).
Australian Business Ambassador to Indonesia Jennifer Westacott, who facilitates commercial links between Australia and Indonesia, pointed out that there are challenges lingering especially agriculture, food security and biosecurity, as well as in cybersecurity.
“Many of them just take a long time to sort out,” Westacott told The Jakarta Post and TechInAsia on Friday. “We need to be realistic that some things are complicated.”
The IA-CEPA aims to streamline trade and eliminate tariffs on most goods traded between the two countries.
As part of the agreement, Australia eliminated 6,474 tariff posts, all the import duties on Indonesian products coming into country. Meanwhile, Indonesia eliminated 10,229 tariff posts, equivalent to 94.5 percent of import duties on Australian products.
Read also: More open Indonesia-Australia trade needed for climate progress, experts say
While the free trade pact is already in place, Westacott said both parties must build trust and improve perceptions so the two can strengthen trade ties.
