Indonesia-Australia Comprehensive Economic Partnership Agreement

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.

Submissions

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.

News

Sixth Round of Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) negotiations

The sixth round of IA-CEPA negotiations was hosted by Australia in Canberra from 20 to 24 February 2017. This was the fourth round of negotiations to be held since IA-CEPA's reactivation by Ministers in March 2016.

The Australian delegation was led by DFAT and included representatives of the Departments of: Agriculture and Water Resources, Attorney General, Austrade, Communication and Arts, Education and Training, Employment, Health, Immigration and Border Protection, Industry Innovation and Science, Treasury and Standards Australia.

The Indonesian delegation was led by the Ministry of Trade and included representatives from a number of Ministries and Agencies including: Agriculture, Bank of Indonesia, Communications (KOMINFO), Competition Agency (KPPU), Coordinating Ministry of Economic Affairs, Customs and Excise, Economic Creative Agency, Finance, Financial Services Authority (OJK), Foreign Affairs, Health, Industry, Investment Coordinating Board (BKPM), National Development Planning (BAPPENAS), National Standardization Agency (BSN), Manpower and Tourism.

Australia and Indonesia exchanged revised goods market access offers and discussed text for all prospective chapters during the round. Some negotiating groups agreed to meet intersessionally to progress discussions ahead of the next round, scheduled for May.

The seventh round of negotiations is scheduled to take place in Indonesia in May 2017.

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:

Launch of negotiations - November 2010

Resources

Guiding Principles, Objectives and Organisation of Negotiations

Indonesia and Australia agreed the Guiding Principles, Objectives and Organisation of Negotiations for IA-CEPA at the first round of negotiations. This will serve as an ongoing reference document throughout the course of negotiations.

IA-CEPA: Guiding Principles, Objectives and Organisation of Negotiations

Indonesia-Australia Business Partnership Group (IA-BPG) Position Paper

The IA-BPG presented its Position Paper on Considerations Towards the Indonesia-Australia Comprehensive Economic Partnership Agreement to both governments in November 2012.

IA-BPG Position Paper [PDF 2 MB]

AusAID Discussion Paper - Trade, aid and development in Indonesia

In February 2011, AusAID released a discussion paper on trade, aid and development in Indonesia.

The paper considers issues relevant to the trade, aid and development policy agenda.

Joint Feasibility Study

In August 2007, Australia and Indonesia commenced a joint feasibility study to examine the merits of a bilateral free trade agreement (FTA). That study was completed and publicly released in April 2009:

Australia-Indonesia FTA Joint Feasibility Study [PDF 472 KB]

The feasibility study, which included an independent economic modelling component, examined the potential impact of an FTA on Australian and Indonesian economic growth, trade, investment, commercial linkages and competitiveness.

Estimating the impact of an Australia–Indonesia trade and investment agreement [PDF 1.12 MB] - Centre for International Economics, January 2009

The study found that a comprehensive FTA covering trade and investment would provide worthwhile economic benefits for both countries. It shows that the greatest gains would be achieved under an FTA that eliminated all tariff and non-tariff barriers to bilateral trade and investment. It also finds that an FTA would be an opportunity to accelerate and deepen the integration of the Australian and Indonesian economies — the two largest in the region.

The study further concludes that a bilateral FTA would complement and build on Australia's other links with Indonesia. These include: close security cooperation under the umbrella of the Lombok Treaty (2008); extensive people to people links which would naturally benefit from intensified economic engagement; and the dynamic Australia-Indonesia Development Partnership.

Indonesia-Australia FTA Feasibility Study - Background Paper for Industry Consultations - 17 October 2007

Contact us

  • Email: ia-cepa@dfat.gov.au
  • Mail:
    Free Trade Agreement Division
    Department of Foreign Affairs and Trade
    RG Casey Building
    John McEwen Crescent
    BARTON ACT 0221

For media enquiries, please call DFAT's Media Liaison Section: (02) 6261 1555.