T

he talks between Indonesia and Australia on the free trade agreement, known as the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), will likely conclude soon with new Australian Prime Minister Scott Morrison planning to visit Jakarta this week.

Australian National University (ANU) economist and Southeast Asian economy expert Hal Hill said it was important to take note that Morrison chose Indonesia for his first official visit overseas because it meant he was aware of the importance of bilateral relations between Indonesia and Australia.

“Even though he [Morrison] has yet to learn and experience a lot of international affairs, he immediately understood Indonesia’s interests [in Australia],” Hill told The Jakarta Post on the sidelines of a seminar held by SMERU Research Institute on Monday.

Indonesia and Australia have enjoyed trade facilities under the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), which for Indonesia came into force in 2012.

The IA-CEPA talks, meanwhile, had started in 2010 but were then put on hold until 2016, when the two governments restarted the negotiations.

The government-funded Australian broadcasting corporation reported that Morrison was expected to announce alongside President Joko “Jokowi” Widodo that they had “in principle” reached an agreement over the free trade arrangement, which promises a win-win partnership that brings economic relations up to a new level.

A spokesperson for the Australian Embassy in Jakarta said earlier that Morrison was expected to meet Jokowi at the former’s earliest convenience.

“In Australia in March, the leaders of both countries committed to concluding IA-CEPA negotiations this year. Negotiators are now working through the final stages of the deal, and we expect it to be concluded soon,” the embassy spokesperson said.

Hill said it was relevant for Indonesia and Australia to enhance their economic relations given the many similarities the two countries bore.

For example, as members of the G20, Hill mentioned that both Indonesia and Australia still relied on exports of raw commodities to boost their economies.

Furthermore, both countries are geographically separated from other major economies in the United States, Europe and East Asia, and therefore were likely to team up against growing protectionism in developed nations, especially the US.

Australia is one of Indonesia’s major trading partners with a surplus on Australia’s side, according to data from the Trade Ministry.

The data shows a slight decline of 4.11 percent in trade transactions from 2013 to 2017. In the first half of this year, both countries’ total trade reached US$4.06 billion with a deficit of $1.37 billion on Indonesia’s side, up 18 percent year-on-year from $1.67 billion.

The ministry’s secretary-general, Karyanto Suprih, confirmed with the Post on Monday that the Indonesian government had targeted to conclude the talks this month, but did not provide further details on progress in the agreement.

According to the ministry’s website, the latest round of the talks took place in Jakarta from Dec. 4 to 8, 2017.

In the following month, Coordinating Economic Minister Darmin Nasution said the government had expected to wrap up the talks by this August, with remaining discussions on some technical aspects regarding goods and services. Darmin stated they were minor issues.

Indonesia and Australia are also involved in the talks on the Regional Comprehensive Economic Partnership (RCEP) between ASEAN country members and six Asia-Pacific countries.

Trade Minister Enggartiasto Lukita said during the ASEAN-Australia Special Summit in Sydney in March that Australia played a crucial role in expediting the conclusion of the trade negotiation.

“During a bilateral meeting [with Australia’s then-prime minister Malcom Turnbull], the President asked Australia to help ASEAN bring the talks to a conclusion. We expected Australia to be more pragmatic, as some of our partners in ASEAN consider Australia as being ambitious,” Enggartiasto said, referring to President Jokowi.