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Australia-Indonesia agreement

“The signing of the Indonesia Australia Comprehensive Economic Partnership by the Prime Minister, Scott Morrison, and President Widodo, will ensure that Australian companies are in a better position to grow alongside our nearest most populous neighbour,” Ai Group Chief Executive, Innes Willox, said.

“Advances in Tariff reduction and improved Trade Facilitation measures will multiply the benefits that already exist through the ASEAN Australia NZ FTA (AANZFTA). Exporters will now consider Indonesia to be a more attractive market alternative, particularly in dairy, fruit & veg and meat.

“Ai Group members often mention at-the-border and behind-the-border barriers as the biggest obstacles to expanding into the Indonesian market. The ground-breaking agreement to dedicate an entire FTA Chapter to non-tariff measures, as well as streamlining the export documentation requirements will give Australian exporters the confidence to have another look at this growing market,” Mr Willox said.

The Managing Director of Ai Group member and 2017 Australian Exporter of the Year, Ego Pharmaceuticals, Alan Oppenheim, said: “We are hopeful that the proposed reduction in cross-border paperwork and additional attention being given to behind-the-border issues will improve access to the market. Our exports to Indonesia are small and should be ten times as large.”

Mr Willox added: “The increased access to the services and training market that allows Australian ownership of up to 67 per cent for the supply of certain technical and vocational training, will support the efforts of Australian companies investing in Indonesia and increase the pool of skilled workers familiar with Australian technology and processes.

“Mining and related services are also big winners with a guarantee that Australian companies can own up to 67% of contract mining and mine site preparation services. The proximity of the market to our mining hubs has fostered a collaborative partnership. Even though current laws give priority to Indonesian suppliers we are aware of at least 40 Australian companies supplying mining and related services in the Indonesian market, illustrating there is a strong demand for Australian companies to provide services in this area.

“This agreement is welcome and will no doubt prompt many companies to have another look at the Indonesian market,” Mr Willox said.

Source: Ai Group

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