Jakarta, March 11, 2019 (Antara) - The signing of the
Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) has
marked a new chapter in the economic relations between the two countries.
The IA-CEPA
creates a framework for Australia and Indonesia to unlock the vast potential of
bilateral economic partnership, fostering economic cooperation between
businesses, communities, and individuals.
On March 4, 2019,
the IAPA was officially signed by Indonesian Minister of Trade, Enggartiasto
Lukita, and Australian Minister of Trade, Tourism, and Investment, Simon
Birmingham, in Jakarta.
The agreement had
been negotiated since 2010 but was halted until November 2013. Later, in March
2016, the agreement had been reactivated.
"The
signing of this agreement is very valuable. After six years of consideration,
it has been signed," Lukita stated, adding that it also reflects the
strong economic bond between the two countries.
The IA-CEPA will
erase 100 percent goods tariff rate from Indonesia to Australia, and 94 percent
goods tariff rate from Australia to Indonesia.
By signing the
agreement, both Indonesia and Australia will gain benefits, such as The
Indonesian Fast Moving Consumer Goods (FCMG) market, which is expected to
benefit from Australia's cheaper sugar, and Indonesian pesticides, which will
be more competitive in Australian market.
Indonesian
Industry Minister Airlangga Hartarto considered the signing of the agreement as
a new milestone in the Indonesian and Australian bilateral relations.
"The
IA-CEPA will have a positive impact on the Indonesian and Australian economies
in the long term," Hartarto noted.
The CEPA not only covers agreements on trade,
services, and investment but also on wider economic cooperation.
The minister
remarked that the IA-CEPA had been special as it involved the private sector
since the start of its negotiation.
The Indonesia-Australia
Business Partnership Group (IA-BPG) has offered views and inputs during the
negotiation process and a feasibility study of the IA-CEPA since the initiation
of the talks.
Hartarto
expressed hope that the involvement of private sector businessmen will continue
to increase following the signing of the agreement.
Through the
IA-CEPA, the partnership concept will make Indonesia and Australia economic
powerhouses, with notably a collaboration of the two countries' comparative
excellence to boost export productivity and competitiveness in third counties.
Moreover, in the
service and investment fields, the IA-CEPA will provide a stimulus for
Indonesian investors to invest their money in the higher education field and
vocation, particularly related to culinary arts.
Australia's
investment will upgrade the quality of Indonesian human resources in the
processed food industry in Indonesia.
Indonesia's
workers will also receive facilities to obtain work holidays and training visas
in Australia.
Under the
IA-CEPA framework, the two countries will have an opportunity to establish
economic cooperation in developing a food innovation center, which will provide
input from food research to Indonesia's processed food industry.
In addition, the Indonesian manufacturing industry will
have a greater chance to increase exports to Australia.
Indonesia's
exports to Australia will increase as Australia has committed itself to
eliminate import duties to 0 percent for all postal tariffs.
Among the
Indonesian commodities whose exports could be increased are automotive products
(particularly electric and hybrid cars); wood and its derivatives, including
furniture; textiles and textile products; tires; communication instruments;
medicines; and electronics.
The agreement
provides easier local content qualifications for Indonesia's electric and
hybrid cars, so that the Indonesian automotive industry can export electric and
hybrid cars without having to build all production technology and facilities
from zero.
"The
manufactured goods for which we are trying to spur exports are textiles,
clothing, and footwear. Today, Indonesia's key exports to Australia include
furniture, rubber products, processed chemicals, foods and beverages, textiles,
and electronics," he pointed out.
The IA-CEPA will
also further enhance several business channels, including Australian
agricultural exports, and Indonesian paper and palm oil exports.
Besides,
investment and service sectors, such as health and education, are also covered
in the agreement.
"The two
countries will build partnership that combines service and partnership in
sectors attractive to Indonesia, such as the health and education sector, as
well as training," Indonesian Vice President M Jusuf Kalla explained while
witnessing the signing of the agreement.
In the service
sector, the two countries will explore cooperation in the sectors of mining,
energy, iron and steel, finance, vocational and higher education, tourism,
health, and agribusiness.
Investment in
the vocational and higher education sector has become one focus of cooperation
to improve the quality of human resources.
"The next
major agenda for Indonesia is to improve the quality of human resources to make
it more competitive. I am waiting for investment in university and training and
vocational education in Indonesia," he elaborated.
Kalla has
expressed hope that the agreement would enhance bilateral ties and open wider
business opportunities for people in both countries.
The IA-CEPA is a
different agreement from those we have with other countries. It is based on
strategic aim to grow together as neighboring countries, according to Kalla.
He expressed
his optimism that CEPA between Indonesia and Australia can be a new milestone
in improving bilateral relations between the two countries and a symbol of
mutually beneficial partnership not only for today but also for the future.
Establishing
partnership with Australia is important for Indonesia, considering that both
countries have geographical and economic closeness.
(f001/INE)
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EDITED BY INE
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