Thu, 26 Feb 2009
From: The Jakarta Globe
By Dian Ariffahmi & Teguh Prasetyo
The Association of Southeast Asian Nations, or Asean, is set to ink a free-trade agreement today with Australia and New Zealand. The deal, dubbed AANZ-FTA, is expected to remove import duties worth $2.95 billion annually on Indonesian exports to Australasia this October, and will see tariffs gradually eliminated on a wide range of important exports from then until 2020.

The deal will be signed at the 14th Asean summit, which was rescheduled to be held from Friday to Sunday at the Thai beach resort of Hua Hin, after it was postponed in December last year due to the political crisis in Bangkok.

Indonesia’s textile and garment producers, pulp and paper manufacturers, furniture makers and nickel miners are all set to benefit after the agreement comes into effect in October, with Australia removing 93 percent of the tariffs it levies on imports of these products from Indonesia.

In return, Indonesia will remove import duties and other tariffs in 2009 from five key Australian exports - salt, wheat flour, animal feed, cotton and aluminium.

Other industries set to benefit from lower tariffs include automotive parts, electronics and agribusiness, although sectors deemed “sensitive” will only see tariffs being removed gradually between 2017 and 2020.

Indonesian farmers will also benefit from capacity-building programs provided by Australia and New Zealand.

Speaking about the signing of the AANZ-FTA, Trade Minister Mari Elka Pangestu said that with the agreement, Indonesia would have bilateral pacts in place with Australia and New Zealand. “This agreement is not just about commodities, but also about foreign investment opportunities and the sharing of knowledge,” Mari said in Jakarta on Wednesday.

Indonesia is Australia’s fourth largest trading partner among the Asean nations, with bilateral trade amounting to more than $10.3 billion in 2007-08, according to Australia.

Regarding fears among Indonesian farmers about the country being flooded by imported dairy and beef products from Australia and New Zealand, Mari said that tariffs would only be removed gradually to ensure that Indonesia’s agribusiness sector was able to grow and develop first.

“A total of 92.98 percent of Indonesia's exports will have no tariffs on them when the FTA comes into force in October 2009, but beef and dairy products will not be included on that list,” Mari said.
For these products, the agreement would only become effective between 2017 and 2020, depending on the readiness of Indonesia’s agricultural sector, she said.

Commenting on the benefits Indonesia will gain from the FTA with Australasia, Rahmat Gobel, a member of the Indonesian Chamber of Commerce and Industry, or Kadin, said the Australian market would be difficult for Indonesian exporters and investors - “In reality, it’s more about our Australian counterparts realizing the potential of the Indonesian market.”

“Kadin is of the opinion that the FTA with Australia and New Zealand will pose some challenges for the industrial sector in Indonesia. We will have to work to increase our productivity and the quality of our products as the FTA will impose tighter quality requirements,” he said.

Zero-tariff exports to be extended to Indonesia from Australia, from 2009:

Textiles

Footwear

Pulp and paper

Nickel

Wood and furniture

Zero-tariff exports and imports to be extended to Indonesia from Australia and New Zealand, from 2017:

Beef

Dairy

Automotive


Thu, 26 Feb 2009
From: JakChat
Comment by Roy's Hair
AANZ-FTA. Catchy. And no doubt just as pernicious as NAFTA.


Thu, 26 Feb 2009
From: JakChat
Comment by KuKuKaChu
Originally Posted By: Roy's Hair
AANZ-FTA. Catchy.

indeed, it just rolls off the tongue.



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