Indonesia and Australia on Tuesday agreed to establish a comprehensive partnership to increase the volume of trade and investment between the two countries.
“For the sake of the two nations, we agreed to think about establishing a comprehensive economic partnership between us so that what has been achieved in trade could be increased,” President Susilo Bambang Yudhoyono said during a joint media conference in Jakarta with Australian Prime Minister Julia Gillard.
“The relationship and cooperation between Australia and Indonesia is good and developing, and we agree this cooperation needs to intensify in the future.”
The trade volume between the two countries in 2009 was $6.7 billion.
In the first half of this year, trade between the two countries hit $4.4 billion, an increase of 22 percent over the same period last year.
In 2009, Australia invested $79.7 million in Indonesia in various fields such as mining, electricity, construction, transportation and communications, according to figures from the Coordinating Ministry for the Economy.
Gillard, on a two-day visit, said the partnership would deal with a wide range of economic issues to bring both nations closer together. “
Today, as our relationship strengthens, we have been able to agree to our two countries entering a comprehensive economic partnership,” she was quoted as saying by Reuters.
“One that not only comprehends further trade liberalization but deals with the full range of economic issues that bring our countries together, including investment, business-to-business links and capacity building.”
Among the main commodities exported to Australia from Indonesia are crude oil and gold. Australian exports to Indonesia are made up of mainly agricultural products, such as wheat, cattle and cotton, and aluminum oxide.
Hatta Rajasa, the coordinating minister for the economy, said that over the past five years total bilateral trade between the countries increased on average by 10 percent annually from $4.8 billion to $6.7 billion.
“Indonesia and Australia have the potential to expand trade and investment,” Hatta said.
“However, as Australia’s economic condition is much more advanced than Indonesia’s, the framework of economic partnership and cooperation should be a more comprehensive one that can give balanced results and ensure mutual benefit.”
Both leaders have agreed to start negotiations on the Indonesia-Australia Comprehensive Economic Partnership Agreement.
According to the Ministry of Trade, Indonesia expects the IA-CEPA to help boost GDP by 0.23 percent , mainly gained from trade liberalization of goods and service and investment.
The agreement will cover various aspects of trade including customs procedures, technical regulations and standards, electronic commerce, government procurement and competition policies.
The partnership is also expected to help Indonesia build production capacity in agriculture, fisheries, manufacturing, mining and energy, among other industries.