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Indonesia trade agreement to boost $2.5bn export market
Elizabeth Gracie
Farmers are set to reap the benefits of the Australia-Indonesia Comprehensive Economic Partnership Agreement (IA-CEPA), which will officially commence on July 5th, following nearly a decade of negotiations.
Under the agreement, nearly all Australian agricultural commodities will be able to enter Indonesia duty and quota-free, which will significantly increase trade access between the two countries.
Indonesia is one of the fastest-growing economies in the Indo Pacific, with its economy estimated to be one of the world’s largest by 2030. In 2018/19, the total two-way trade in goods and services with Indonesia was worth $17.8bn. From that figure, Australian agricultural exports accounted for $2.5bn.
The IA-CEPA trade agreement positions Australia to take a share of Indonesia’s economic growth.
The Australian Government Department of Foreign Affairs and Trade (DFAT) hopes that the IA-CEPA will create a framework for Australia and Indonesia to “unlock the vast potential of bilateral economic partnership, fostering economic cooperation between businesses, communities, and individuals”.
This move will also provide Australians with a greater range of international produce on supermarket shelves.
National Farmers’ Federation (NFF) president Fiona Simpson notes that “The IA-CEPA agreement will provide Australian farmers with exceptional access to one of the most important markets in the world”.
This will include increased shipments of cattle, beef, sheepmeat, dairy, sugar, fruit, vegetables, and honey.
The IA-CEPA agreement will also allow for an increased quota for Australian cattle to be exported to Indonesia with duty-free access for 575,000 head of live male cattle per year according to the NFF. This will then continue to grow at an estimated four percent per year to 700,000.
Simson says “this is a historic day for Australian agriculture, the Australian government and Trade Minister Birmingham in particular, should be commended for their achievement”.
The IA-CEPA agreement “will mean that 99 percent of Australian goods (by value) will enter Indonesia duty-free or under significantly improved preferential arrangements” said Federal Minister for Trade, Tourism and Investment, Simon Birmingham.
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