Australia and Indonesia move forward with free trade deal

Australia and Indonesia move forward with free trade deal

Negotiators will meet in Canberra today for the next round of talks on the Indonesia-Australia Comprehensive Economic Partnership Agreement, a

Photo: Presidential Office/Laily Rachev)

Photo: Presidential Office/Laily Rachev

Negotiators will meet in Canberra today for the next round of talks on the Indonesia-Australia Comprehensive Economic Partnership Agreement, a free trade deal.

The relationship has untapped potential, with Indonesia only Australia’s 16th largest trading partner. To upgrade it, Jakarta wants tariffs cut on paper and palm oil exports in return for slashing duties on Australian sugar.

Canberra has talked up the agreement, with Trade Minister Steve Ciobo declaring it his “number one trade priority”. On July 7, Malcolm Turnbull posted a video with Indonesian President Joko Widodo, hoping to wrap up the deal by year’s end and praising ties between the two neighbours as “getting stronger all the time”.

Despite the optimism, the path ahead has roadblocks. One came in April when Australia slapped a tariff on Indonesian paper over concerns its cheap price hurt the domestic market. Though Mr Ciobo has stressed it was an independent commission’s decision and not the Turnbull government’s, Jakarta will undoubtedly want the duty eliminated.

With Australia also eyeing deals with the EU and a post-Brexit UK, Turnbull will hope today’s talks go well not only for their own sake, but to presage a free trade winning streak.