Australia and Indonesia agree to examine options for a bilateral free trade agreement

Australian Government Minister for Trade, Warren Truss, has welcomed today’s announcement that a joint feasibility study will be undertaken into the merits of a free trade agreement (FTA) between Australia and Indonesia.

Prime Minister John Howard and Indonesian President Susilo Bambang Yudhoyono made the announcement in Bali today.

The announcement follows a recommendation by members of the Australia-Indonesia Trade and Investment Framework Experts Group that the two countries consider the costs and benefits of an FTA. The recommendation was made to Australian and Indonesian trade ministers at a meeting in Jakarta on June 25.

The study will examine the impact on Australia and Indonesia of an FTA, including implications for economic growth, trade, investment, commercial linkages and competitiveness.

The FTA feasibility study will commence in August 2007 and is expected to be completed by the middle of 2008.

“Australia and Indonesia have deep linkages in many areas, including trade and investment,” Mr Truss said.

“It is crucial that we continue to look at mechanisms that will strengthen these ties further. The feasibility study will consider the prospects of an FTA creating significant commercial opportunities for business in both countries.”

Mr Truss said the initial stage of the process would comprise working-level bilateral meetings and consultations.

“As part of the study, I will be consulting other Ministers, the States and Territories, relevant industry groups and stakeholders to ensure that all views are taken into account in developing Australia’s approach to any future FTA negotiations with Indonesia.”

Australia’s two‑way trade in goods and services with Indonesia reached A$10.4 billion in 2006, making Indonesia our 13^th largest trading partner.

Media Inquiries: Minister Truss' office 02 6277 7420 - Departmental Media Liaison 02 6261 1555