Australia, Indonesia Finalize Trade Agreement
Australia and Indonesia have concluded negotiations on a new trading agreement that will eliminate tariffs on a range of products.
On August 31, Australian Prime Minister Scott Morrison and Indonesian President Joko Widodo announced the conclusion of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).
Morrison and his Minister for Trade, Simon Birmingham, said in a statement: “IA-CEPA will support Australian industrial producers in areas such as steel, copper, and plastics. Australian service industries including health, mining, telecommunications, tourism, and education will also have greater access to Indonesia’s growing economy.”
In addition, Australian farmers will be able to export 500,000 tonnes of feed grains, such as wheat, into Indonesia tariff free.
Morrison told reporters that “when you’re getting rid of tariffs, you’re basically taking taxes off things that are being bought in Australia and our key imports that come out of Indonesia – particularly petroleum and furniture and… wood and even footwear – these are things that will no longer have tariffs on them.”
Australia and Indonesia agreed in November 2010 to negotiate a free trade agreement. Negotiations stalled, with only two rounds of talks held between 2010 and July 2013. Negotiations were then “reactivated” in March 2016, following a three-year hiatus.
Both sides agreed to commit to conclude negotiations on the broader Regional Comprehensive Economic Partnership.
The announcement was welcomed by the Australian Chamber of Commerce and Industry. CEO James Pearson said: “We hope that [the] announcement, and the prospect of a formal signing in the near future, will boost trade and investment between our two nations, and build on the fact that Indonesia and Australia are already partners, along with the rest of ASEAN, in our long-standing trade agreement AANZFTA [the ASEAN-Australia-New Zealand FTA].”
However, Pearson warned that Australia must do more to remain competitive, with competition for global markets becoming more intense and the prospect of trade wars looming. He said: “Australia is already suffering from a decline in our ranking in international competitiveness and international trade, which means less investment, fewer jobs, and missed opportunities for Australian businesses.”
Source: Tax News
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