Indonesia International Trade Agreement

Indonesia is the sixth country in the region to enter into negotiations for a bilateral free trade agreement with the EU, after Singapore (2010), Malaysia (2010), Vietnam (2012), Thailand (2013) and the Philippines (2015). To date, the EU has concluded negotiations on bilateral agreements with two of them: Singapore (2014) and Vietnam (2015). Bilateral free trade agreements between the EU and ASEAN countries will form the building blocks of a future EU-ASEAN agreement, which remains the EU`s ultimate goal. Indonesia is a member of the free trade agreement between ten ASEAN member states and China. The original framework was signed on November 4, 2002. Under the agreement, which came into force on 1 January 2010, China and the six ASEAN members, Indonesia, Malaysia, Brunei Darussalam, the Philippines, Singapore and Thailand, wanted to reduce import duties to more than 90% of the goods traded. On January 28, 1992, more than 99% of the product categories in this trading bloc were duty-free. In terms of Indonesia`s intra-ASEAN business activities in 2015, Singapore and Malaysia led the way with USD 30.6 billion and US$16.1 billion respectively. Indonesia has signed and implemented a number of free trade agreements with countries and regions around the world as an independent market and as a member state of the Association of Southeast Asian Nations (ASEAN). Among the agreements, with all these years of work by Australia and Indonesia to create an exuberant environment for bilateral trade and investment, and given the proximity of our land masses, Indonesia can soon climb higher, where Australians do business. Negotiations for a free trade agreement between the EU and Indonesia began on 18 July 2016 following fruitful exploratory discussions aimed at deepening trade and investment relations between the EU and Indonesia. The aim is to conclude a free trade agreement that facilitates trade and investment and covers a wide range of issues such as tariffs, non-tariff barriers, trade in services and investment, trade aspects of public procurement, competition rules, intellectual property rights and sustainable development. A Framework Agreement on Partnership and Comprehensive Cooperation was signed on 9 November 2009 and came into force on 1 May 2014.

The agreement forms the basis of regular political dialogue and sectoral cooperation and takes bilateral relations to the next level. The agreement provides a legal framework for integration and cooperation in a wide range of policy areas, including human rights, political dialogue and trade. These bilateral trade and investment agreements were designed as building blocks for a future agreement between the regions. A number of opportunities continue to be offered to Australian businesses, as the larger and richer consumer base creates potential for potential markets. According to the latest available figures, Australia`s annual two-way trade with Indonesia is $14.8 billion. This means that only 2.2% of our total world trade with Indonesia is underway, underscores the huge growth potential of our larger trade revenues with much less populous countries like Malaysia, Singapore and New Zealand. The agreement, which came into force in 2011, involves members of the D-8 Economic Cooperation Organization, namely Indonesia, Malaysia, Bangladesh, Pakistan, Iran, Egypt, Turkey and Nigeria. An agreement with a closer economic partnership between Indonesia and Australia is being negotiated, based on existing agreements. Indonesia applies the most favoured nation status to Australian imports, while Australia applies equivalent concessions through its tariff in developing countries.