On Monday, Indonesia and Australia signed a free trade agreement which will eliminate tariffs in both countries. Australian-owned hospitals will soon operate in Indonesia and work visas for young Indonesians in Australia will be increased.
The agreement was signed by Trade Ministers of the two countries- the culmination of 9 years of negotiations since the year 2010. The current agreement is subject to ratification in both countries. The Indonesian Minister of Trade, Enggartiasto Lukita mentioned that Indonesia is set to complete the ratification by the end of this year. Despite being neighbours, Indonesia and Australia’s trade in goods and services happen to be relatively small, with a value of $11.6 billion per year. Indonesia, on the other hand only sends 1.5 percent of its total exports to Australia.
Australian Minister of Trade Simon Birmingham said the agreement “will take Australian and Indonesian relations to a new plane, one in which our economic and trade relations will be much deeper, stronger and richer for both our nations.”
The agreement will allow Australian companies to have majority ownership investments in Indonesia from various sectors. Australia also aims to make 99 percent of its exports to Indonesia tariff-free by 2020, while Indonesian exports to Australia will face no tariff. The Australia-Indonesia agreement will allow Australian companies to have majority ownership of investments in various industries in Indonesia, including health care, telecommunications, energy, mining, and aged care.
Australia’s live cattle exports are set to increase under the agreement, with the number of animals exported to Indonesia allowed to increase 4 percent a year with reduced tariffs. Working holiday visas are expected to increase from 1,000 a year to 6,000, in the course of six years.
Australia Minister of Trade, Tourism and Investment Simon Birmingham, left, and Indonesia Minister of Trade Enggartiasto Lukita, right, at the signing of the agreement in Jakarta yesterday
Source: The Washington Post
Image: AP