The Comprehensive Economic Partnership Agreement (AI-CEPA) between Indonesia and Australia is a bilateral agreement signed between Australia and Indonesia in March 2019 and ratified by Australia in November 2019 and Indonesia in February 2020. The agreement includes a free trade agreement that removes tariffs on almost all products traded between the two countries, in addition to relaxing investment regulations in Indonesia for Australian companies and increasing the quota for Indonesians seeking vocational training in Australia. IA-CEPA provides a framework for Australia and Indonesia to unlock the potential of bilateral economic partnership and promote economic cooperation between businesses, communities and individuals. Australia has many opportunities to develop its trade, investment and economic cooperation relations with Indonesia. IA-CEPA builds on the benefits of the ASEAN-Australia-New Zealand Free Trade Area Agreement (AANZFTA), which continues to operate alongside IA-CEPA. Importers and exporters have the opportunity to choose the agreement that suits them best. The agreement also contains important results for non-tariff measures, trade in services, trade facilitation, investment protection and capacity building. IA-CEPA includes clauses on bilateral free trade, investments, visas for professional training, investor arbitration, e-commerce and intellectual property protection. [1] Under the agreement, Indonesia will levy tariffs on almost all Australian products exported to Indonesia, while all Indonesian products exported to Australia will be duty-free. [2] Australian companies would be allowed to hold a majority stake in Indonesian telecommunications, transport, healthcare and energy companies. In addition, the number of working holiday visas issued to Indonesians each year would increase from 1,000 to 4,100 (later to 5,000[1] by 2026), and Australian universities would be allowed to open Indonesian campuses. [3] Under THE IA-CEPA, 99% of Australian goods will enter Indonesia duty-free (by value) or under significantly improved preferential regimes. IA-CEPA will also support stronger value chains between Australian and Indonesian companies and ensure that Australia is well positioned to deepen economic cooperation and participate in Indonesia`s growth.
It will also provide a significant boost in a number of services sectors, including education, training, tourism, finance, mining and energy, and provide new mechanisms to eliminate non-tariff barriers to trade. Shortly after Indonesia ratified the agreement, Australia`s Monash University unveiled plans to open a campus in Indonesia, becoming the first foreign university to do so in Indonesia. [20] Indonesian economic observers noted that the free trade agreement could lead to an increase in imports of agricultural products, particularly Australian beef, which could replace the local beef industry. [21] The Australian Labor Party has also questioned the treaty`s clauses on investor-state disputes and Indonesian temporary work in Australia. [22] Australia and Indonesia are committed to deepening their economic, trade and investment relations. Indonesia is the largest economy in Southeast Asia and the 16th largest economy in the world. According to some estimates, Indonesia will be the fifth largest economy in the world by 2030. With a population of 264 million, Indonesia represents a significant opportunity for Australian businesses. Easily accessible information on export and import opportunities under IA-CEPA, AANZFTA and other free trade agreements is available on the FTA portal. Further information is available on the IA-CEPA website of the Department of Foreign Affairs and Trade and on the Austrade IA-CEPA website, including the full contract text, a guide on using IA-CEPA for exporting or importing goods.
During the first overseas visit of the new Australian Prime Minister Scott Morrison during his tenure in Jakarta, he and Jokowi announced an agreement on IA-CEPA on August 31, 2018. [12] However, the signing was delayed due to a bilateral dispute over Australia`s recognition of West Jerusalem as Israel`s capital, which led to diplomatic protests from Indonesia. [13] [14] The agreement was finally signed in March 2019 by Lukita and Australian Trade Minister Simon Birmingham, subject to ratification by the Australian Parliament and the Indonesian People`s Representative Council. [15] [16] The Indonesia-Australia Comprehensive Economic Partnership Agreement (AI-CEPA) provides the framework for a new era of closer economic ties between Australia and Indonesia, opening up new markets and opportunities for businesses, primary producers, service providers and investors. IA-CEPA is a comprehensive agreement that builds on existing multilateral and regional agreements, including the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA). IA-CEPA entered into force on July 5, 2020. .
