Indonesia market snapshot
- GDP: US$870.3 billion (2013)
- GDP per capita: US$3,510 (2013)
- GDP growth: 5.8 per cent (2013)
- Population: 248 million (2013)
- Trade with Australia: A$14.9 billion (2013)
About the IA-CEPA negotiations
Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) negotiations commenced in Jakarta in September 2012. IA-CEPA aims to strengthen and expand the trade, investment and economic cooperation relationship between Australia and Indonesia. It will help bring the region's two largest economies closer together and will form a key part of Australia's regional economic integration as part of the Asian Century.
Indonesia is a significant economic and regional partner for Australia. Two-way trade in goods and services reached $14.9 billion in the 2013 calendar year, making Indonesia our 12th largest trading partner and 11th largest export market. Australian investment in Indonesia was worth an estimated $10.9 billion in 2013. Austrade estimates that there are more than 400 Australian companies operating in Indonesia, in sectors including mining, agriculture, construction, infrastructure, finance, health care, food and beverage and transport.
The announcement of the commencement of IA-CEPA negotiations follows the release of the Joint Feasibility Study on an Indonesia-Australia Free Trade Agreement in April 2009 and the entry into force of the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA). It is expected that the IA-CEPA will build on the outcomes of the AANZFTA.
Key interests and benefits
- The IA-CEPA could address impediments to bilateral trade, including those which impose additional costs on exporters and consumers, and impede economic competitiveness.
- A comprehensive agreement that addresses the impediments to increasing Australian investment in Indonesia and Indonesian investment in Australia would enhance the bilateral relationship in a number of important respects.
- IA-CEPA could explore ways to enhance economic cooperation in specific sectors identified as key drivers of economic growth.
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:
The presentations were also recorded by the AIBC Conference organiser and the videos are also provided below: