FTA with Australia, NZ to cover textiles, forestry

FTA with Australia, NZ to cover textiles, forestry

Rendi A. Witular, The Jakarta Post/Wellington

Indonesia will propose special facilities for some of its leading
industries in upcoming preliminary negotiations for a free trade
agreement (FTA) with Australia and New Zealand, a minister has
said.

Minister of Trade Mari Elka Pangestu said on Thursday that
Indonesia's FTA proposal for Australia would most likely cover
products in the sectors of textiles and garments, automotive,
footwear, and electronics, as well as services -- in particular,
skilled nurses.

"Currently, Indonesian products face a number of tariff and
non-tariff constraints to get into Australia. The FTA is expected
to remove them, especially for products and services that
Indonesia are good at," said Mari during her visit with President
Susilo Bambang Yudhoyono to Australia and New Zealand.

Mari reiterated that at present, Australia imposed high
tariffs for some of Indonesia's most important products, while
non-tariff barriers mostly revolved around problems of quality
standards and capacity building.

It is due to these problems that the trade relationship
between the two countries has remained relatively insignificant,
with Indonesia ranked as Australia's 16th largest trading partner
with bilateral trade worth some A$8 billion (US$6.5 billion) last
year.

Meanwhile, in the services sector, Indonesia will be expecting
Australia to help local nurses by providing training and
professional certification in Indonesia to enable them to work in
Australia.

"We are hoping that Australia will open its door wider for
Indonesian skilled laborers, since we have allowed them to invest
in and operate hospitals in Indonesia.

"I believe Australia now lacks nurses and skilled workers in
other service sectors," said Mari.

Indonesia and Australia are now assessing the advantages and
constraints in setting up the FTA between the two nations, with
negotiations over essential facilities for the actual agreement
to be conducted later on.

Indonesia, Southeast Asia's largest economy, has lagged behind
Singapore, Malaysia and Thailand in initiating FTA talks with
Australia, as well as with New Zealand, due in part to the
unclear, uncoordinated trade and industry policies of previous
governments.

Elsewhere, regarding a trade agreement with New Zealand, Mari
said that it was still at an early stage. Two-way trade between
the two countries last year was only US$330 million, with New
Zealand's exports to Indonesia being valued at $180 million, and
Indonesia's at $150 million.

Trade is mostly in forestry-based products such as pulp, paper
and furniture.

"The FTA talks with New Zealand are still very preliminary. We
formed a trade and investment commission with them in 2001,
however, no follow-up has been done since. Now we want to
reignite the commission to start talking about the FTA," said
Mari, adding that the commission was scheduled to meet in
November.

Mari said Indonesia would propose cooperation in furniture and
other wood-based products to be included in the trade agreement.

"Forestry based industries in New Zealand are very advanced,
and we need to cooperate with them in order to boost our trade
activities as well as improving our sustainable forest
management," said Mari.