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Great untapped opportunities in Indonesia-Australia trade

Free Trade Agreement Division, DFAT

University students taking a selfie.

The Government's top trade priority is the Indonesia-Australia Comprehensive Economic Partnership Agreement.

Prime Minister Malcolm Turnbull and Indonesia's President Joko Widodo have called for IA-CEPA's conclusion by the end of the year, to capitalise on the great potential between our two economies. With a population of more than 258 million and an economy approaching US$1 trillion annual turnover, there is enormous scope to expand our trade and investment with Indonesia – our 13th largest trading partner. An ambitious IA-CEPA will increase coverage for Australian exporters beyond our existing trade agreement with Indonesia, the ASEAN Australia New Zealand Free Trade Agreement. We want IA-CEPA to establish a framework for an enduring and dynamic partnership, to help us trade better with Indonesia into the future.

IA-CEPA aims to be more than a traditional free trade agreement. It will broaden and deepen the economic relationship particularly in services trade. Education will make a strong contribution to IA-CEPA, with a focus on skills acquisition including in vocational education and training (VET). It is a compelling example of the complementarities between the two economies. President Widodo has called for broad VET reform to improve the education outcomes for Indonesia's burgeoning youth and middle class. Australia has world-class expertise in the provision of VET with a flexible, industry-led system that has effective quality control.

Negotiations of IA-CEPA have already delivered early outcomes that will help Australian services providers gain better access to the Indonesian market. A memorandum of understanding between the Australian Centre for Financial Studies and Indonesia's financial services authority, called OJK, is facilitating joint research between Australia and Indonesia into best-practice financial services regulation. This project will help improve the regulatory environment in Indonesia for Australian financial services providers.

The early outcomes epitomise the value of know-how. Some notable initiatives have fostered better understanding of each other's systems that enable us, in turn, to realise opportunities, including in services trade. The scope of such activities includes industries such as IT design and fashion, red meat and cattle, and herbal and well-being products.

There is potential for greater collaboration to expand our broader services trade including in financial services, health, tourism and hospitality, professional services, telecommunications and e-commerce. We will be crystallising these opportunities in the coming months. DFAT invites written submissions from individuals and organisations on the potential opportunities and impacts of IA-CEPA throughout the negotiations. Further information on how to make a submission is available at

Last Updated: 7 August 2017
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