ASEAN KEY DESTINATIONS
Australia, Indonesia discuss free trade
Indonesia and Australia are eager to get to the negotiating table, but the neighbors get down to business, Indonesia has some loose ends that require attention.
Negotiating teams from the two countries met in Sydney on Tuesday for preliminary talks on the Indonesia-Australia Comprehensive Economic Partnership Agreement,a deal that is set to cover much more than just free trade.
“This pre-negotiation consultation is very preliminary to prepare common understanding and expectation between the two countries before we enter the negotiation,” said Michael Mugliston, a special negotiator for Free Trade Agreement Division of Australia’s Department of Foreign Affairs and Trade.
Mugliston also said Australia was still waiting for Indonesia to ratify the Asean-Australia-New Zealand Free Trade Agreement.
The AANZFTA came into effect on Jan. 1, 2010, for Australia, New Zealand, Brunei, Burma, Malaysia, the Philippines, Singapore and Vietnam. Thailand followed soon after, while Laos and Cambodia ratified the agreement in November.
Indonesia is the only remaining signatory that has yet to ratify the agreement. Mugliston said it must ratify the AANZFT before proceeding with negotiations on the IACEPA, which he said would be supported by the earlier agreement. The Department of Foreign Affairs and Trade Web site says “Indonesia is working to complete its internal requirements at the earliest possible opportunity.”
The agreement will go into effect 60 days after Indonesia provides notification it has finished the internal requirements.
Mugliston described the IACEPA as an “ambitious” partnership as it involves more than just free trade.
“It is aimed at increasing productivity, educating rural people and increasing rural earnings. It will also increase domestic supply in the Indonesian market while maintaining the supply from Australia,” he said. He added that as spending power increased in Indonesia, demand for commodities that Australia can supply would also increase.
Herry Soetanto, the head of the Trade Policy Analysis and Development agency at the Trade Ministry, said feedback from businesses in both countries was important.
“We encourage the business community to take part in this agreement. They can submit their suggestions via the Ministry of Trade’s Web site,” he said.
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