Australia-Indonesia free trade talks enter tough final stage

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Sidney Morning Herald | 8 November 2017

Australia-Indonesia free trade talks enter tough final stage

by Jewel Topsfield

Prime Minister Malcolm Turnbull is expected to meet Indonesian President Joko Widodo in coming days as the two countries hammer out the final details of the first free trade deal Indonesia has signed in almost a decade.

The 10th – and both countries hope final – round of negotiations will be held in Jakarta next week with Australia’s chief trade negotiator Trudy Witbreuk stressing there was "no question about the level of commitment in trying to conclude this economic partnership agreement".

However Indonesia’s chief negotiator Deddy Saleh has warned Indonesia, which is riding a wave of economic nationalism with protectionist resources policies and national targets for self sufficiency in some foods, will not be able to meet all of Australia’s requests.

"Negotiations with Australia is sometimes very easy, many times very hard," Mr Deddy said. "As Indonesian chief negotiator I have to coordinate with all ministries. That is the hardest part, we are very, very tough on negotiations domestically."

Mr Deddy said Australia had requested that Indonesia reduce import duties on meat, sugar, tropical fruit, vegetables, machinery and electrical goods. "Indonesia can give some but Indonesia is having some difficulties to give all requested by Australia."

Mr Deddy also pointed out the bilateral goods trade was going backwards, shrinking from $US10.6 billions in 2014 to $US8.4 billions last year. He said Indonesia had a trade deficit with Australia of about $2 billion: "Australian exporters are more aggressive than Indonesian".

Research analyst Jarryd de Haan recently wrote the two major commodities behind the fall in Indonesian exports were crude petroleum (due to falling global prices), and unrefined gold (due to falling Australian demand).

Ms Witbreuk, Australia’s chief negotiator, said there would be "quite a lot of political engagement" over the next couple of days about the free trade deal, known as the Indonesia Australia Comprehensive Economic Partnership Agreement.