Indonesia-Australia Comprehensive Economic Partnership Agreement negotiations

About the IA-CEPA negotiations

On 2 November 2010, President of the Republic of Indonesia, Susilo Bambang Yudhoyono and the Prime Minister of Australia, Julia Gillard agreed to commence negotiation of an Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA). A comprehensive economic partnership covering economic cooperation, trade and investment issues would contribute to building a higher-level and mutually beneficial economic partnership between Indonesia and Australia.

Indonesia is a significant economic and regional partner for Australia. Two-way trade in goods and services reached $12.9 billion in 2010, making Indonesia our 12th largest trading partner and 11th largest export market. Australian investment in Indonesia was worth an estimated $5.2 billion in 2010. Austrade estimates that there are more than 400 Australian companies operating in Indonesia, in sectors including mining, agriculture, construction, infrastructure, finance, health care, food and beverage and transport.

The announcement of the commencement of IA-CEPA negotiations follows the release of the Joint Feasibility Study on an Indonesia-Australia Free Trade Agreement in April 2009 and the conclusion of the negotiation of the ASEAN-Australia-New Zealand Free Trade Agreement. It is expected that the IA-CEPA will build on the outcomes of the AANZFTA.

Key interests and benefits

• The IA-CEPA could address barriers to bilateral services trade, which impose additional costs on exporters and consumers, and retard economic competitiveness.
• A comprehensive agreement that eliminates the widest possible range of direct and indirect barriers to Australian investment in Indonesia and Indonesian investment in Australia would enhance the bilateral relationship in a number of important respects.
• Other potential benefits of the agreement include coverage of customs services, sanitary and phytosanitary measures, technical regulations and standards, intellectual property rights, electronic commerce, competition policy, and government procurement.

News

IA-CEPA Pilot Project works towards increased cattle productivity in Indonesia

Agricultural cooperation is an important part of the Indonesia-Australia bilateral relationship. Through technical assistance and capacity building initiatives, this cooperation aims to increase agricultural productivity in key sectors and improve food security.

Improving the productivity of smallholder beef cattle production is a high priority for the Indonesian Government and is integral to strengthening rural livelihoods and increasing the supply of domestically-produced beef in Indonesia. As a result, in association with negotiation of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), Australia is supporting research aimed at improving the profitability of smallholder beef producers in Indonesia.

Under the project, the Australian Centre for International Agricultural Research (ACIAR) is working with farmers to improve Brahman cattle production systems in Indonesian villages, with the potential that these animals can be sold to Indonesian feedlots. Compared to local Indonesian breeds, such as Bali cattle, Brahmans have faster growth rates but only when fed higher quality diets.

More information is available at ACIAR - Improving beef cattle productivity in Indonesia.

Trade Minister visits Indonesia - April 2011

Dr Emerson's first visit to Indonesia as Trade Minister comes as Australia and Indonesia prepare for negotiations on a Comprehensive Economic Partnership Agreement (CEPA).

Media release: Trade Minister visits Indonesia, 17 April 2011

Australia-Indonesia Business Council (AIBC) conference - 7 March 2011

The Australia-Indonesia Business Council (AIBC) held a conference in Sydney on 7 March 2011 titled “Deepening our Economic Partnership”. The IA-CEPA was a key theme of the conference, and Australia’s and Indonesia’s Lead Negotiators delivered presentations on the current state-of-play.

The presentations are available at the links provided below:

• Herry Soetanto, Head of the Agency for Trade Policy Analysis And Development, Ministry Of Trade, Republic Of Indonesia [PDF 50 KB] | [DOC 46 KB]
• Michael Mugliston, Special Negotiator, Free Trade Agreement Division, Department of Foreign Affairs and Trade [PDF 246 KB] | [PPT 623 KB]

The presentations were also recorded by the AIBC Conference organiser and the videos are also provided below:

Launch of negotiations - November 2010

• Media release: Trade Minister welcomes launch of Australia-Indonesia negotiations, 3 November 2010
• Media release: Announcement to Negotiate an Indonesia-Australia Comprehensive Economic Partnership, 2 November 2010

IA-CEPA Submissions

The Department of Foreign Affairs and Trade welcomes submissions from interested individuals and groups on the expected impacts of IA-CEPA. Submissions need not be lengthy, and may build on or refer to submissions made during the joint feasibility study on a bilateral FTA.

Guidance on preparing submissions for the Indonesia-Australia Comprehensive Economic Partnership Agreement negotiations

In particular, information is sought on specific interests and issues in relation to Australia’s trade, investment and economic cooperation with Indonesia, including barriers to trade and investment faced by Australian goods and services exporters and investors in Indonesia as well as experiences with economic cooperation activities.

Submissions will be made publicly available on the DFAT website unless the author specifies otherwise.

Public submissions to the Indonesia-Australia Comprehensive Economic Partnership Agreement negotiations

Public submissions concerning the Joint Feasibility Study on an Australia-Indonesia Free Trade Agreement

Submissions have been received concerning the desirability of an Australia-Indonesia FTA. Submitting parties represent a wide range of interested groups, including peak industry organisations, professional associations, companies, non-government organisations, individuals and state governments.  

See the ist of contributors who have given permission to be identified, and/or have their submission(s) made public.

2007 public submissions on an Australia-Indonesia FTA

Resources

• Trade, aid and development in Indonesia - a discussion paper [DOC 4.47 MB]
• Trade, aid and development in Indonesia - annexes [DOC 1.35 MB]

Joint Feasibility Study

In August 2007, Australia and Indonesia commenced a joint feasibility study to examine the merits of a bilateral free trade agreement (FTA). That study was completed and publicly released in April 2009:

Australia-Indonesia FTA Joint Feasibility Study [PDF 472 KB]

The feasibility study, which included an independent economic modelling component, examined the potential impact of an FTA on Australian and Indonesian economic growth, trade, investment, commercial linkages and competitiveness.

Estimating the impact of an Australia–Indonesia trade and investment agreement [PDF 1.12 MB] - Centre for International Economics, January 2009

The study found that a comprehensive FTA covering trade and investment would provide worthwhile economic benefits for both countries. It shows that the greatest gains would be achieved under an FTA that eliminated all tariff and non-tariff barriers to bilateral trade and investment. It also finds that an FTA would be an opportunity to accelerate and deepen the integration of the Australian and Indonesian economies — the two largest in the region.

The study further concludes that a bilateral FTA would complement and build on Australia's other links with Indonesia. These include: close security cooperation under the umbrella of the Lombok Treaty (2008); extensive people to people links which would naturally benefit from intensified economic engagement; and the dynamic Australia-Indonesia Development Partnership.

Indonesia-Australia FTA Feasibility Study - Background Paper for Industry Consultations - 17 October 2007

Contact us

• Email: ia-cepa@dfat.gov.au
• Fax: (02) 6261 2187
• Mail:
  Free Trade Agreement Division
  Department of Foreign Affairs and Trade
  RG Casey Building
  John McEwen Crescent
  BARTON ACT 0221

For media enquiries, please call DFAT's Media Liaison Section: (02) 6261 1555.