Former Minister for Trade
Australian Commonwealth Coat of Arms

19 February 2009, 8th Australia-Indonesia Trade Ministers’ Meeting Press Release

Towards a Free Trade Agreement with Indonesia

The Minister for Trade Simon Crean and Indonesia’s Minister for Trade, Dr Mari E Pangestu, met today in Sydney for talks aimed at strengthening the bilateral trade and investment relationship.

Both Ministers welcomed the final draft of the Joint Feasibility Study on an Indonesia-Australia Free Trade Agreement. The study found that a comprehensive FTA would build on the solid foundation of the ASEAN-Australia New Zealand FTA and provide worthwhile gains for both countries.

“An FTA between Australia and Indonesia would be a major step forward in the bilateral trade and economic relationship. Both governments must now consider the study. I will discuss the next steps with my Ministerial colleagues, including undertaking a process of further public consultation,” Mr Crean said.

“The Australia-Indonesia trade relationship has not kept pace with the growing strength of many other aspects of the bilateral relationship. A bilateral FTA could help realise the significant untapped potential in our trade relationship.

“We agreed that an FTA which covers trade, investment and capacity building issues would be the best way to build a new economic partnership between Indonesia and Australia,” Mr Crean said.

Mr Crean said the Australian Government - like the Indonesian Government – put an emphasis on multilateral trade liberalisation, but he also said these arrangements could be enhanced by a high quality bilateral FTA. Both Ministers reaffirmed their commitment to a liberal international trading environment to ensure that trade plays a positive part in dealing with the global economic crisis.

“We agreed on the importance of concluding a comprehensive, balanced outcome in the World Trade Organization Doha Round of trade negotiations in 2009,” Mr Crean said.

“We welcomed the soon to be signed ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) – Australia’s largest FTA agreement – which will help drive regional economic integration.

During the Ministerial meeting Mr Crean raised a number of market access concerns of Australian industry, relating to both goods and services exports, as well as investment. Ministers also discussed the implementing regulations to be promulgated under Indonesia’s Mining Law.

“We appreciated the opportunity to meet with Australian and Indonesian business leaders during a Business Lunch Dialogue to discuss new opportunities to increase bilateral trade and investment. The bilateral trade and investment relationship has not grown as strongly as it should and we discussed with business leaders how government could assist their efforts,” Mr Crean said.

With total two-way trade in 2007-08 of $10.3 billion, Indonesia is Australia’s fourth largest trading partner in ASEAN and our 13th largest trading partner overall. Australia exported $4 billion of merchandise goods and close to $1 billion in services to Indonesia in 2007-08. Australian investment in Indonesia is growing strongly and was valued at $3.4 billion at the end of 2007.

Media Inquiries: Mr Crean's office 02 6277 7420 - Departmental Media Liaison 02 6261 1555