Indonesia market snapshot
- GDP: US$872.6 billion (2015 forecast)
- GDP per capita: US$3,415.8 (2015 forecast)
- GDP growth: 4.7 per cent (2015 forecast)
- Population: 252.2 million (2014)
- Trade with Australia: A$14.8 billion (2014-15)
About the IA-CEPA negotiations
The Indonesia-Australia Comprehensive Economic Partnership (IA-CEPA) will create the framework for a new era of closer economic engagement between Australia and Indonesia and open new markets and opportunities for businesses, primary producers, service providers and investors. IA-CEPA will build on existing multilateral and regional agreements including AANZFTA and be as comprehensive as possible. Australian and Indonesian Trade Ministers reactivated negotiations in March 2016 after they were first launched by Leaders’ in 2010.
Negotiators are meeting approximately every three months and working groups have been established to progress work in a number of areas including: trade in goods, rules of origin, customs procedures and trade facilitation, technical barriers to trade, sanitary and phytosanitary measures, services, investment, telecommunications services, e-commerce, financial services, competition policy, institutional and framework provisions and economic cooperation.
A number of outcomes from IA-CEPA have been brought forward to demonstrate the benefits of closer economic cooperation between Australia and Indonesia. Early outcomes that have already been progressed include the Indonesia-Australia Business Partnership Group, the Red Meat and Cattle Partnership, and cooperation on Financial Services and in the Creative Industries (fashion and jewellery).
Key interests and benefits
- The IA-CEPA could address impediments to bilateral trade, including both tariff and non-tariff barriers.
- IA-CEPA could improve access to each other’s services markets and address impediments to increasing Australian investment in Indonesia and Indonesian investment in Australia.
- Economic cooperation under IA-CEPA could assist in the implementation of the agreement, support trade facilitation and provide a pathway for future liberalisation.
Indonesia-Australia Business Partnership Group Phase II
The IA-BPG is a platform for Australian and Indonesian businesses to come together to discuss joint interests and provide recommendations to government on the trade relationship.
The Phase II report of the IA-BPG, “Two Neighbours, Partners in Prosperity”, has been released on the Australian Chamber of Commerce and Industry website.
“Two Neighbours, Partners in Prosperity” provides recommendations to the Australian and Indonesian Governments about businesses interests in IA-CEPA. IA-BPG members have called on Governments in Australia and Indonesia to ensure that IA-CEPA provide for the progressive removal of all trade barriers and facilitation of two-way trade in goods and services, plus investment. Business communities in both countries have called for greater integration of the Australian and Indonesian markets to create greater opportunities for businesses, and greater prosperity in both Australia and Indonesia.
A series of mutually beneficial economic cooperation programs will be developed alongside IA-CEPA to support momentum in the negotiations and demonstrate the benefits of a closer economic relationship between Australia and Indonesia.
Phase-I of the IA-BPG led to a report to the Indonesian and Australian Governments about business interests in IA-CEPA in October 2012. Please contact the Australian Chamber of Commerce and Industry for more information on the IA-BPG.
In addition to the IA-BPG process, the Department of Foreign Affairs and Trade welcomes submissions from stakeholders on all aspects of trade with Indonesia in order to inform the IA-CEPA negotiating agenda.
In particular, information is sought on Australia’s trade, investment and economic cooperation interests in Indonesia. We would also welcome information on barriers to trade and investment faced by Australian goods and services exporters and investors in Indonesia. Please note our guidance on preparing new or revised submissions.
DFAT would like to thank those individuals and organisations who have already made submissions. Where permission has been provided to do so, submissions received have been made available on our Public Submissions page.
IA-CEPA: Increasing Indonesia-Australia business opportunities
The Indonesian National Standards Body, Badan Standardisasi Nasional (BSN) and Standards Australia (SA) have embarked on an exciting initiative to support the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), currently being negotiated between the Governments of Indonesian and Australia. The project aims to identify standards harmonisation opportunities and to promote greater understanding of the role that standards play in underpinning trade between the two countries.
Standards Australia media release
Fifth Round of IA-CEPA negotiations
The fifth round of IA-CEPA negotiations was hosted by Indonesia in Bandung from 31 October – 4 November 2016. This was the third round of negotiations to be held since IA-CEPA's reactivation by Ministers in March 2016.
Fifth round of IA-CEPA negotiations, 31 October - 4 November 2016, Bandung
Fourth Round of IA-CEPA negotiations
The fourth round of IA-CEPA negotiations was hosted by Australia in Sydney from 23-26 August 2016. This was the second round of negotiations to be held since IA-CEPA’s reactivation by Ministers in March 2016.
Fourth round of IA-CEPA negotiations, 23-26 August 2016, Sydney
Minsters Ciobo and Lukita reconfirm bilateral commitment to IA-CEPA
On 2-3 August 2016, Australian Trade Minister Ciobo met his newly appointed Indonesian counterpart, Minister Lukita, new Chairman of the Indonesian Investment Coordinating Board (BKPM) Thomas Lembong, New Minister for Finance Sri Mulyani Indrawati and Minister of Industry Airlangga Hartarto in Jakarta to build further momentum for the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA). IA-CEPA will create the framework for a new era of closer economic engagement between Australia and Indonesia and open new markets and opportunities for businesses and consumers.
During the visit, Ministers Ciobo and Lukita met the Indonesia-Australia Business Partnership Group (IA-BPG) and received their updated report, ‘Two Neighbours, Partners in Prosperity’. The IA-BPG is a unique platform that brings together peak Indonesian and Australian business groups to help inform IA-CEPA negotiations. The report updates recommendations from 2012 and is hosted on the Australian Chamber of Commerce and Industry website.
Third Round of IA-CEPA Negotiation
The third round of IA-CEPA negotiations was hosted by Indonesia in Yogyakarta from 2-4 May 2016.
Third round of Indonesia-Australia Comprehensive Economic Partnership Agreement negotiations, 2-4 May 2016, Indonesia
Indonesia-Australia Business Partnership Group Meets in Perth
28 April 2016
Phase II of the Indonesia-Australia Business Partnership commenced on April 26th with a stakeholder meeting in Perth. The BPG will hold a further three meetings over coming weeks to seek the views of Australian and Indonesian businesses to be reflected in a report to both Governments.
Further information on the meeting
Indonesia-Australia Comprehensive Economic Partnership Agreement
16 March 2016
Australian Minister for Trade and Investment, Steven Ciobo and his Indonesian counterpart Minister Lembong, have announced the re-activation of negotiations towards a free trade agreement with Indonesia.
The Joint Statement of Intention will drive these negotiations forward.
While Indonesia is a close neighbour and firm friend, our trade and economic relationship can and should be performing better. The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) will launch a new era of closer economic engagement between our countries.
Second Round of IA-CEPA Negotiation
The second round of IA-CEPA negotiations was held on 29-31 July 2013 in Canberra.
Second round of Indonesia-Australia Comprehensive Economic Partnership Agreement negotiations, 29-31 July 2013, Canberra
First Round of IA-CEPA Negotiations
The first round of IA-CEPA negotiations concluded in Jakarta on 26-27 March 2013.
First round of Indonesia-Australia Comprehensive Economic Partnership Agreement negotiations, 26-27 September 2012 and 26-27 March 2013, Jakarta
Joint Business Report Presented to Governments
A ground-breaking position paper from the Indonesia-Australia Business Partnership Group (IA-BPG) on the bilateral trade and investment relationship was presented to the Australian and Indonesian Governments in November 2012.
The paper puts forward a set of recommendations to improve trade, investment and economic cooperation for the governments of both countries to explore when negotiating the Indonesia-Australia Comprehensive Economic Partnership Agreement.
IA-BPG Position Paper [PDF 2 MB]
Business Partnership Group to consult on benefits of IA-CEPA for Australia and Indonesia
A core principle of the proposed Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) is that it is of mutual economic benefit. Identifying key barriers to trade for both Australian and Indonesian exporters as well as industry objectives and concerns is an important step in ensuring that a liberalising and beneficial agreement is achieved.
Representatives from the Australian Chamber of Commerce and Industry (ACCI), Indonesian Chamber of Commerce (KADIN), Australia-Indonesia Business Council (AIBC) and the Indonesia-Australia Business Council (IABC) have established a Business Partnership Group (BPG). The BPG will submit views to the Indonesian and Australian governments on what it considers to be the primary trade, investment and economic cooperation objectives of the IA-CEPA. The Business Partnership Group advice will be contained in a position paper which is expected to be submitted later in 2012.
The first Business Partnership Group meeting will be held in Sydney on 13 September, with subsequent meetings to be held in Jakarta and Eastern Indonesia.
BPG Media Release: Open Door to Business Feedback on Indonesia Partnership
Indonesia-Australia Annual Leaders Meeting - July 2012
Former Prime Minister Julia Gillard and President Susilo Bambang Yudhoyono met for the Second Annual Indonesia-Australia Leaders' Meeting in Darwin on 3 July 2012. Former Prime Minister Gillard and President Yudhoyono expressed their support, in the Joint Leaders Communique, for the launch of IA-CEPA negotiations before the end of 2012.
Joint Communiqué: Australia-Indonesia Annual Leaders' Meeting
Trade Minister visits Indonesia - March 2012
Former Minister for Trade, Dr Craig Emerson, held talks with his Indonesian counterpart, other Indonesian ministers, and business representatives in Jakarta on 21-22 March. His discussions, inter alia, explored how business and government could work together to develop the IA-CEPA.
Trade Minister visits Indonesia for ASEAN Business Summit - November 2011
Former Trade Minister Dr Emerson met with senior Indonesian ministers and business people in Bali, Indonesia, on 18-20 November to discuss trade and IA-CEPA developments. In a speech delivered at the Indonesia-Australia Business Council annual conference he stressed the importance of ‘Partnership’ in the IA-CEPA. He said this theme should be maintained in our broader engagement on the IA-CEPA.
IA-CEPA Pilot Project works towards increased cattle productivity in Indonesia
Agricultural cooperation is an important part of the Indonesia-Australia bilateral relationship. Through technical assistance and capacity building initiatives, this cooperation aims to increase agricultural productivity in key sectors and improve food security.
Improving the productivity of smallholder beef cattle production is a high priority for the Indonesian Government and is integral to strengthening rural livelihoods and increasing the supply of domestically-produced beef in Indonesia. As a result, in association with negotiation of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), Australia is supporting research aimed at improving the profitability of smallholder beef producers in Indonesia.
Under the project, the Australian Centre for International Agricultural Research (ACIAR) is working with farmers to improve Brahman cattle production systems in Indonesian villages, with the potential that these animals can be sold to Indonesian feedlots. Compared to local Indonesian breeds, such as Bali cattle, Brahmans have faster growth rates but only when fed higher quality diets.
More information is available at ACIAR - Improving beef cattle productivity in Indonesia.
Trade Minister visits Indonesia - April 2011
Former Trade Minister Dr Emerson made his first visit to Indonesia as Trade Minister in April 2011 as Australia and Indonesia prepared for negotiations on a Comprehensive Economic Partnership Agreement.
Media release: Trade Minister visits Indonesia, 17 April 2011.
Australia-Indonesia Business Council (AIBC) conference - 7 March 2011
The Australia-Indonesia Business Council (AIBC) held a conference in Sydney on 7 March 2011 titled “Deepening our Economic Partnership”. The IA-CEPA was a key theme of the conference, and Australia’s and Indonesia’s Lead Negotiators delivered presentations on the current state-of-play.
The presentations are available at the links provided below: