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QUESTION: Minister Crean, thank you very much for this opportunity. We were up in northern Australian at the cattle yards there. At the beginning of the program we met with cattle farmers there who told us that they have very significant trade relations with Indonesia. From your perspective, how would you describe the current trade relations that Australian has with Indonesia?

SIMON CREAN: I think that the current trade relations I would describe as adequate but should be a lot better. Indonesia is the largest economy in ASEAN, yet our trade with ASEAN has grown - ASEAN as a whole - has grown significantly faster than it has with Indonesia. I think that there is enormous potential for the trade to be strengthened between Australia and Indonesia. The feasibility study that we released last year confirms that. What we are obviously aiming for is to take that feasibility study the next step and to indicate, both governments indicate that we want to proceed to an FTA. That decision hasn't been formally taken as yet, but I think it would be a very good step forward.

Another significant development was the ASEAN Free Trade Agreement that Australia and New Zealand negotiated with ASEAN as a whole. Indonesia reached agreement obviously as a part of that, but it has not yet ratified. So the benefits that should have come into effect from 1 January, including improved market access for beef, live beef, hasn't as yet. There's still issues surrounding the translation to the schedules. We would hope that that could be completed as expeditiously as possible.

QUESTION: So there's room for improvement?

SIMON CREAN: Significant room for improvement, and so there should be. I mean, you look at the size of the Indonesian economy, you look at its proximity to us, you look at the inter-relationship. I thought that what was very interesting in the discussions when Minister Pangestu visited last February was that the agreement that we reached, or the outcome of the meeting that we reached, recognised that the relationship shouldn't just be around trade; it should also be about capacity building. So in addition to the people that you spoke to in the - in northern Australia about live cattle exports, there's also the question of herd management, the services dimension, if you like, to sustainable agriculture, herd management, beef production, and the like. And so capacity building on that front, together with dairy herd management, is pretty important, given the commitment that Indonesia has going forward in terms of food security and the importance of the dairy industry in the overall economy.

QUESTION: I'm going to go back to the feasibility study on the agenda; what are some of the key points from the study that the shortage [indistinct] for the countries that will benefit both countries?

SIMON CREAN: Well, I think the realisation that if we can reach a comprehensive FTA between our two countries, then there are important benefits to both countries; significantly, more benefits to both countries building off the platform that is the ASEAN free trade agreement. But the opportunity to further strengthen the capacity building argument that we have signalled a preparedness to enter into with Indonesia.

QUESTION: Minister, China is a big word in Indonesia. Also, right now, soon to be the second biggest economy in a few years. China, also with ASEAN, step into the free trade agreement in full blown capacity. Do you see that as - does Australia see that as a threat, or an opportunity?

SIMON CREAN: We don't see this as a threat. We think that all countries liberalising their markets and becoming more integrated within the economic region is a great thing, great thing. And that's why, off the back of the ASEAN free trade agreement, we are keen to promote closer economic integration within the region, with the ASEAN plus sixes. So it includes China, it includes India, Japan, Korea and Australia and New Zealand. I understand that there are issues domestically in Indonesia concerning the China-ASEAN free trade agreement and some of those are having a spill-over impact in terms of people's appreciation of the Australian-ASEAN free trade agreement. But we hope that people can see through the differences in that regard. But no, we don't see China as a threat. We see China as an opportunity, a huge opportunity too, in terms of its essential inter-relationship with our economy. Its dependence on our resources and energy. The opportunity for investment flows between both countries. The deepening inter-dependency between us and China is one of real opportunity, not threat.

QUESTION: East Asia has been leading the recovery in global trading. How has that - or has that benefited Australia and what are the challenges?

SIMON CREAN: Well the benefit to Australia, of course, is that every - as everyone has been undertaking their stimulus packages, there's been a lot of investment in physical infrastructure. That, in turn, has seen the important growth in demand for resources and energy. And so Australia has benefited, not just from China, but from the whole of the ASEAN and Asian, north Asian regions as well. I mean you look at, you look at the stimulus packages of Korea, Japan, India, China, ASEAN as a whole, Indonesia specifically, this is huge demand for our resources. And despite the fact that exports took a huge hit last year, in the global financial crisis, Australia is one of the very few countries to see growth in export volumes. Now it's true that prices came down, but that's because they'd come off an extraordinarily high level the year before. But in volume terms, Australia's exports, in fact, increased last year.

QUESTION: But you talked about room for improvement at the beginning of the interview. How do you see the two countries moving forward from now on, you know, with the presidential visit being maybe one of the momentums?

SIMON CREAN: Well I think the presidential visit is a great opportunity to strengthen, to deepen and to diversity the nature of our relationship - relationship between the two countries. I particularly have an interest in seeing the economic relationship diversify and deepen. I think that has to be across all of the products and services markets. But it has to take account of the different stage of economic development that Indonesia is in vis-à-vis Australia. Now that can be done in a number of ways. It can recognise the pace at which liberalisation occurs in Indonesia, as distinct from Australia. It can manifest itself also in the capacity building argument that I talked about before.

So we have signalled the preparedness to see the nature of our economic relationship develop, in the knowledge that we have to be more supportive of helping Indonesia build its capacity, to address its capacity deficiency. And as an indication of that, one of the central factors in concluding the ASEAN free trade agreement was a range of capacity building measures being built into that agreement. If we can build on that, then I think there are opportunities for both economies to deepen and diversify the nature of their relationship.

QUESTION: Thank you very much for your time Minister.

ENDS

*Sondang Sirait is the Indonesian winner of the annual Elizabeth O'Neill Journalism Award. The Award is in memory of Liz O’Neill, Public Affairs Counsellor at the Australian Embassy in Jakarta, who died tragically in service on 7 March 2007 as a result of a plane crash in Yogyakarta, Indonesia. The Award is funded by the Department of Foreign Affairs and Trade and the Australia-Indonesia Institute.

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