IA‑CEPA will strengthen and shape Australia's goods trade with Indonesia for decades to come as our economies evolve and grow. In 2018, Indonesia is Australia's 13th largest goods trading partner, and IA‑CEPA will provide a significant boost to develop this relationship further.
IA‑CEPA offers win-win opportunities for business in both countries. Building on the benefits of the ASEAN-Australia-New Zealand Free Trade Agreement, IA‑CEPA will provide improved goods access to the markets of both countries. IA-CEPA will also lead to stronger value-chains between Australian and Indonesian business, working together to become a regional powerhouse.
Key outcomes for trade in goods are:
- Over 99 per cent of Australian originating goods exports to Indonesia will enter duty free or under significantly improved or preferential arrangements.
- Australia will eliminate all of our remaining tariffs on imports of Indonesian goods from entry into force (EIF).
- These outcomes, combined with a program of economic cooperation under IA-CEPA, will help boost bilateral trade as well as exports to third-country markets from both parties.
- For the first time in an Australian FTA, non-tariff measures will have their own dedicated chapter, including a bilateral co-operative mechanism.
- IA‑CEPA will also have sub-committees to discuss sanitary and phytosanitary measures, technical barriers to trade and trade facilitation.
Australia is an important supplier of agricultural products to Indonesia. In 2018, Australia exported an estimated $2.8 billion worth of agricultural goods to Indonesia, over a third (40.4 per cent) of our total goods exports to Indonesia. Once implemented, IA‑CEPA will provide preferential access for more than 99 per cent of Australia's agriculture goods imported by Indonesia. Australian farmers will benefit from IA-CEPA, while Indonesian businesses and consumers will have improved access to Australia's premium produce, including for processing and export to regional and global markets.
|Live cattle||Live cattle is Indonesia's third largest goods import from Australia. IA‑CEPA market access outcomes benefit both countries and support Indonesia's efforts to add value to its own beef production:
|Frozen beef||Indonesia will eliminate its tariff on frozen beef:
|Sheep and goat meat||Indonesia will eliminate its tariff on sheep and goat meat:
|Dairy||Indonesia will eliminate tariffs on dairy products not eliminated under ASEAN-Australia-New Zealand FTA (AANZFTA):
|Vegetables||IA-CEPA outcomes for vegetables include:
|Fruit and Nuts||Indonesia will eliminate tariffs on citrus under tariff rate quotas:
Indonesia will reduce or eliminate tariffs for other fruit and nuts:
|Cereals and grains and products of milling industry||Indonesia will guarantee access for feed grains to complement the strong trade in grains for human consumption:
|Sugar||As an early outcome of IA‑CEPA in 2017, Indonesia reduced its tariff on Australian sugar from around 8.8 per cent to five per cent.|
Australia is an important supplier of manufactured and other goods into Indonesia, including inputs into construction and production processes in Indonesia. Australia's exports of manufactured and other goods to Indonesia were worth around $2.0 billion in 2018. IA‑CEPA offers win-win outcomes through the provision to Indonesian producers of Australian manufactured and other goods at lower cost and with more certain access.
Under IA‑CEPA, Indonesia will eliminate tariffs on 6.2 per cent of tariff lines for manufactured and other goods, (on top of existing elimination under AANZFTA covering 92.0 per cent of tariff lines). By 2025, 99.8% of imports of manufactured and other goods from Australia will be duty-free.
|Steel||Immediate elimination of tariffs on 124 lines in addition to 463 tariff lines already eliminated lines under AANZFTA
|Copper Cathodes||Immediate elimination of five per cent tariff on copper cathodes|
|Plastic||Immediate elimination of tariffs on 38 lines not eliminated under AANZFTA and a further line eliminated by 2023
|Machinery||Immediate elimination of tariffs on 83 lines and a further line eliminated by 2023
|Electronics||Immediate elimination of all tariffs on EIF|
|Textiles||Immediate elimination of all tariffs on EIF|
With the elimination of tariffs on imports of Indonesian products into Australia, Australia business will gain access to cheaper imports in a number of important manufacturing sectors, most notably for a large variety of clothing and fabrics.
Resources and energy
Australian exports of resources and energy products to Indonesia were worth an estimated $2.4 billion in 2018, representing more than one third of Australia's goods exports to Indonesia.
Under AANZFTA, Indonesia has already eliminated tariffs on 97.4 per cent of resource tariff lines covering virtually 100 per cent of existing imports. This includes:
|1||Petroleum oils and oils obtained from bituminous minerals, crude.||911.4|
|2||Bituminous coal, whether or not pulverised, not agglomerated||748.78|
|3||Ferrous waste and scrap; remelting scrap ingots or iron or steel||234.34|
|4||Iron ores and concentrates (incl. roasted iron pyrites)||230.29|
|5||Aluminium Oxide, Except Artificial Corundum, Nesoi||130.42|
|6||Salt (incl. table salt and denatured salt) and pure sodium chloride, whether or not in aqueous solution or containing added anti-caking or free-flowing agents; and sea water||55.13|
|7||Liquefied butane gas (excl. butanes of HS 2901 which contain 95% or more of n-butane or of isobutane)||34.7|
|8||Aluminium waste and scrap||30.02|
|9||Liquefied propane gas (LPG), whether or not pure||18.87|
|10||Copper waste and scrap, excluding waste and scrap of primary cells, primary batteries and electric accumulators||5.93|
|Other Resources Products||17.92|
Indonesia has provided further tariff elimination on three tariff lines from EIF covering table salt and some lubricating oils.
The remaining three tariff lines, remaining lubricating oils, will have tariffs bound at five per cent from EIF. The AANZFTA outcome was a reduction to 15 per cent in 2025.
1. Sector description is based on a simplification of descriptions used in Harmonised Commodity Description and Coding System 2017 (HS 2017).
Fact sheet last update: 27.06.2019