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Free trade deal with Indonesia set to commence in July

The Indonesian Government has officially ratified the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).

On Wednesday May 6, Australia received formal notification that Indonesia has completed its domestic ratification processes.

Australian exporters will soon start reaping the benefits of the IA-CEPA.

IA-CEPA will officially enter into force on Sunday 5 July 2020. It will mean that 99 per cent of Australian goods (by value) will enter Indonesia duty-free or under significantly improved preferential arrangements.

Simon Birmingham, Federal trade minister said the landmark trade deal with Indonesia would enhance export opportunities and deliver significant benefits for Australian farmers, businesses and investors.

“Securing a trade agreement with Indonesia has been a longstanding objective of our government, to further strengthen the strategic partnership between our nations and further expand the choices available for Australian exporters,” he said.

““This is the most comprehensive bilateral trade agreement Indonesia has ever signed, and will give a competitive edge to Australian exporters, particularly at a time when many are doing it tough as a result of the COVID-19 crisis.”

Simon said the economic stresses being caused by COVID-19 in both Australia and Indonesia make this agreement even more important, as it will provide an opportunity to better stimulate growth and investment across both nations during the recovery phase.

“With a population of over 260 million and one of the fastest growing economies in the world, Indonesia presents significant trade and investment opportunities for Australian farmers and businesses,” the Federal trade minister said.

Under the deal, producers of grains, live cattle and meat, dairy and horticulture, and many other products will benefit from lower tariffs and improved access to Indonesian markets.

Simon said, with one in five jobs trade related, enhancing export opportunities for Australian farmers and businesses will be “crucial to reducing job losses arising from the COVID-19 crisis and a critical part of our ultimate economic recovery”.

Andrew Gee, assistant minister for trade, said Australian needs to focus on the things we can make, grow and sell, and agriculture will be a key part of that.

“IA-CEPA will provide new opportunities for our farmers and businesses, and further strengthen our export sector,” Andrew said.

The IA-CEPA was first signed by Prime Minister Scott Morrison and President Joko “Jokowi” Widodo in Federal parliament in Feburary this year.

Indonesia is Australia’s 13th largest trading partner and In 2018-19, the total two-way trade in goods and services with Indonesia was worth $17.8 billion.

 

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