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Indonesia to sign FTA tomorrow

TVNZ, New Zealand

Indonesia to sign FTA tomorrow

9 January 2012

Source: ONE News

Indonesia will sign the ASEAN-Australia-New Zealand free trade agreement (FTA) tomorrow.

It is the final country to join the FTA after the group concluded negotiations in Singapore on 28 August 2008.

Cath Henry, the head of Global Payments and Cash Management at HSBC New Zealand said Indonesia is forecast to be one of New Zealand’s top ten fastest growing trade corridors.

"Trade over the next five years is set to grow at an annualised rate in excess of 7% and by 2025 grow at an annualised rate over 5% - this represents a huge opportunity", said Henry.

New Zealand’s top exports to Indonesia include milk powder, cream, frozen meat, malt extracts, butter, cheese, fish and interestingly chemical wood pulp and ferrous waste and scrap.

Despite dubbing Indonesia an up-and-coming "shining star" economy, Henry said transactions with the country need to be carefully thought over.

"The Indonesia Rupiah (IDR) is still a restricted currency which can’t be remitted outside of the country so payments into and out of the country can require careful consideration", she said.

"In addition, the documentation required to support payments can be viewed as being challenging".

Regardless, Henry said "the rewards of doing business with this emerging market far outweigh any difficulties".