ABC | 28 February 2019
Australia to sign free trade agreement with Indonesia, ending months of uncertainty
By Andrew Probyn
Australia and Indonesia will sign a free trade agreement next Monday, ending months of uncertainty.
The ABC understands Trade Minister Simon Birmingham will fly to Jakarta with a business delegation on Sunday ahead of the signing the following day, with his counterpart Enggartiasto Lukita.
The landmark free trade agreement (FTA) was cemented during Scott Morrison’s first international trip as Prime Minister in September — and it was set to be signed before the end of the year.
The deal hit a wall in October, when Indonesia considered putting the imminent agreement on hold over Mr Morrison’s statement he would consider moving the Australian embassy in Israel to Jerusalem.
Indonesia is a strong supporter of the Palestinian territories and repeatedly expressed its concerns with the embassy proposal.
The heated debate about Mr Morrison’s captain’s call to shift the Australian embassy threatened the FTA. Australia’s Ambassador to Indonesia Gary Quinlan was forced to redouble efforts to assure Indonesian doubters.
Heightening tensions was that President Joko Widodo’s main political rival Prabowo Subianto had been stridently critical of Mr Morrison’s call on Jerusalem.
It was thought only weeks ago that the FTA signing might have to be pushed back until after the Indonesian presidential election on April 17.
Industry leaders react
Australian Industry Group chief executive Innes Willox, who will be among those travelling with Mr Birmingham, said the deal showed maturity in "a relationship that has had its ups and downs".
"We have the world’s longest maritime boundary with Indonesia and very deep relationships around security issues, terrorism issues, but our economic relationship is really undercooked," he said.
The deal could open up new opportunities in areas such as technology and education, Mr Wilcox said.
"Our economic relationship until now has really been based around agriculture," he said.
"But this free trade agreement gives us potential to broaden it and to make it much deeper into services, deeper into manufacturing.
"And there are components there about skill sharing.
"Skill sharing as our economy changes shape and we become more focused on technology is going to be very important to both countries and will tie us closer together as we look forward."
Northern Territory Cattlemen’s Association CEO Ashley Manicaros told AM the development was an "excellent result".
"It’s going to increase the value of the trade between the two countries and it’s going to increase the value to the farmer at the farm gate … it means greater returns which means greater investment back into the industry," Mr Manicaros said.
"The fact that behind the scenes they’ve been able to work through a resolution and the fact they’ll be signing well ahead of that is a very big positive from the industry’s point of view."
AUSVEG national manager Michael Coote said the agreement could see Australia’s major carrot and potato growers back on Indonesian shelves "almost immediately".
"The industry really supports any sort of trade liberalisation," Mr Coote said.
"Indonesia is a major trading partner close to our shores, so there are benefits in terms of reduced freight times.
"Having access back into this market that is so close, has such a large population and does have an appetite for Australian produce is a real boom for the vegetable industry."
Deal faced ups and downs over decade
The trade deal has been eight years in the making and should benefit Australian grain growers, with Indonesia agreeing to import 500,000 tonnes of grain tariff free.
Mr Morrison said in August negotiators had also secured lower tariffs, or greater access on live cattle, dairy and horticulture.
The agreement should also benefit the Australian education sector, with universities and vocational training providers being given the green light to set up shop in Indonesia.
Indonesia wants greater access for Indonesians to work in Australia as well as support for its crude palm oil industry.
The signing is being kept deliberately low-key, given the proximity of the Indonesian election.
Consequently, the decision has been made to keep the signing at trade minister-level, rather than involve the leaders.
Mr Birmingham and Foreign Minister Marise Payne stepped up their efforts to secure the FTA in recent months, in the wake of Malcolm Turnbull’s ousting as prime minister.
Mr Turnbull had formed a strong relationship with Mr Widodo and his exit from Australian politics was thought to have imperilled the deal.