Mon, 12 Nov 2007
NUSA DUA, Bali (JP): Indonesian Trade Minister Mari Pangestu called on Indonesian and Australia business people to try to diversify the type of goods and services exchanged between the two countries as their two governments are exploring to establish a free trade agreement.

Acknowledging that export and import figures with Australia are booming this year, she told the Indonesia Australia Business Council (IABC) that goods and services traded have remained relatively unchanged.

“We are making progress, but we are still trading in the traditional way,” she said.

“I want to put it on the table, how do we change this? How do we diversify our trade?” she said in keynote speech opening the two-day Indonesia Australia Business Conference.

The ministers said Indonesia’s exports to Australia have been growing by 40 percent in value in the first semester of this year, against a 20-30 percent increase in imports. Indonesia is exporting petroleum products, wood and paper products and television sets, while it is importing petroleum products, aluminum, wheat, cotton and milk from Australia.

Mari also noted a significant decline in services trade between the two countries in recent years, most notably with the decline in the number of Indonesians studying in Australia and in the number of Australians tourists visiting Indonesia.

The two governments are still at the preliminary stages of negotiating a free trade agreement, but Mari already underlined a number of areas where the two countries could expand trade into new areas away from the traditional sectors.

She listed sending skilled Indonesian workers to fill in the shortage of workers in Australia as one area where the business community should look into and use some of the Australian aid money to Indonesia to help with capacity building by providing training and certification for Indonesian workers in the health and construction sectors.

Indonesia so far has only one free trade agreement, with Japan, while Australia has already signed such agreements with all its top six trading partners with the exception of Indonesia, she said.

Mari also said there had been talks about exporting Indonesian fruits to Australia, by which the Australian importers would provide assistance in capacity building to the Indonesian growers.

She listed mango and mangostein, but ruled out durian and banana, the last one because it could hurt banana grower in Australia.

A participant on the floor cautioned Mari against writing off durian, given the increasing Asian population, particularly in Sydney, who crave for the smelly fruit.

“We’ll add durian to the list,” Mari responded.



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