CANBERRA (Xinhua) – Australia and Indonesia signed a landmark free trade agreement (FTA) on Monday after years of negotiations.
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Australia’s Minister for Trade, Tourism and Investment Simon Birmingham joined his Indonesian counterpart Enggartiasto Lukita to sign the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) in the Indonesian capital Jakarta.
Both Australia and Indonesia rank in the world’s top 20 economies but are not in each other’s top 10 trading partners despite being close neighbours.
“Bolstering economic ties between our nations will create new trade opportunities for Australian and Indonesian businesses, boost two-way investment and increase prosperity in both countries,” Birmingham and Prime Minister Scott Morrison said in a statement yesterday.
“With a population of 270 million and high levels of economic growth, Indonesia is on track to become one of the world’s largest economies. This makes the strengthening of our ties both strategically and economically important.
“This is a great deal for Australia: it means that 99 percent of Australian goods (by value) will enter Indonesia duty-free or under significantly improved preferential arrangements by 2020.”
In addition, the FTA deal will also provide major benefits for Australian universities and healthcare providers, clearing the way for them to set up shop in Indonesia.
On the other side of the equation, the agreement will eliminate all tariffs on Indonesian imports to Australia and the number of Australian work and holiday visas will rise from 1,000 to 5,000 within six years.
The parliaments of both nations must ratify it before it is enacted, a process that could take months given that Indonesia will hold a general election in April and Australia will do so in May.