Indonesia free trade deal in sight
The Australian, Canberra
Indonesia free trade deal in sight
By Sid Marris
26 June 2007
Australia and Indonesia are inching towards talks on freer trade, as the imminent collapse of global reform talks puts a greater focus on regional deals.
The APEC summit to be held in Sydney in September is expected to provide a venue for talks between John Howard and Indonesian President Susilo Bambang Yudhoyono on a feasibility study for a free trade agreement.
Australia is urging Indonesia to encourage fellow developing nations India and Brazil to return to the negotiating table after a dramatic walkout last week in Germany during the latest session of the Doha round of World Trade Organisation talks.
"I think that the developing countries have a particular interest in securing a successful outcome for the Doha round," Trade Minister Warren Truss said yesterday in Jakarta.
"This is, after all, called the Doha development round and developing countries ... want a successful outcome."
Indonesia is keen to provide opportunities for nurses and welders to come to Australia to meet labour shortages, as well as boosting exports of the traditional automotive and textile, clothing and footwear products. Australia would see greater scope for agricultural products, particularly sugar, and for services suppliers.
Indonesia has been keen on improving ties but has generally found Australia distracted by other pursuits. And Australian travel warnings remain a burr in the trading relationship.
Concerns over climate change have improved relations, with Australia looking to finance Indonesian programs fighting deforestation and promoting development of plantation timber.
An eminent persons group established last year - known as the Australia-Indonesia Trade and Investment Framework - told ministers meeting in Jakarta yesterday that a feasibility study should be considered. Exports from Australia are dominated by petroleum, meat, paper and minerals. Imports are made up of more than twice as much petroleum as Australia exports, plus wood and paper products and electronic items.
A feasibility study would take up to two years.
Mr Truss said the trade relationship between the neighbours was "robust and growing strongly" but "there is potential for more to be done to help grow the trade and to ensure that both our countries benefit."
Indonesia’s Trade Minister Mari Elka Pangestu said Australia was among the country’s most important markets, with two-way trade worth about $10.4billion a year, but the relationship was still "underdeveloped".
Dr Pangestu, who once lectured at the Australian National University, raised concerns that Australia’s travel warning against Indonesia was hurting its struggling tourism industry and possibly trade. The travel advice recommends that Australians reconsider their need to travel to Indonesia, including Bali, because of the "very high threat of a terrorist attack".
"We believe this travel advisory ... could disrupt travel, not only tourists but also investors and potential buyers," Dr Pangestu said. "We want them to review it quarterly ... and consider the progress that has happened in Indonesia."
Additional reporting: AAP
