Indonesia and Australia have finally signed the pact regarding their Comprehensive Economic Partnership Agreement. The countries sealed the trade deal after a long delay due to the diplomatic tensions created by Canberra's plan to relocate its Israel embassy to Jerusalem.
According to Channel News Asia, the trade deal that was signed by Indonesian Trade Minister Enggartiasto Lukita and Australia's Simon Birmingham is called the IA-CEPA and the diplomats sealed the deal in Jakarta on Monday. It was stated as the agreement takes effect, around 94 percent of the Indonesian tariffs will be removed and this covers 99 percent of the Australian trade.
To be more precise, Australia will get to enjoy preferential treatment on shipments to Indonesia where it can ship products like beef, dairies and sugar, and sell to the 260 million citizens of the country. In return, the Aussies will eliminate 100 percent of its tariffs on Indonesian produce like textile and Indonesian furniture makers will enjoy easy access to the Australian market.
The new Australia-Indonesia trade pact will also grant the Australian service providers in the mining, education and medical facilities sectors hassle-free access to Southeast Asia's largest economy.
"The signing of the agreement reflects a deeper level of engagement in the already long established economic relations between Indonesia and Australia," SBS News quoted the Lukita and Birmingham as saying in a joint statement. "The agreement aims at a more comprehensive, high quality and mutually beneficial economic partnership."
The Business Council of Australia and National Farmers' Federation's chief Jennifer Westacott further said, "This is an important agreement for a large developing country like Indonesia, and it demonstrates both Australia's and Indonesia's commitment to rules-based global trade at a time when the voices against freer and more liberal trade are increasingly loud."
Based on the report the Indonesia-Australia trade deal is worth US$11.7 billion in 2017 so this can be translated to higher amount today. The talk about the bilateral agreement between the two countries was first brought up in 2010. At the time of the negotiation that took place in a hotel, Indonesia's Vice President Jusuf Kalla was also present in the hall.
The yearly trade between Indonesia and Australia involving services and goods amounts to $11.6 billion. Compared to their neighboring regions, this value is actually small but the deal is expected to increase the values when tariff-free exports start. Meanwhile, Indonesia has been predicted to become one of the countries in the world that will have the best and biggest economies by the year 2030 since it has a total population of 260 million.
