Australia and Indonesia have signed a trade agreement that will bring greater opportunities for Australia’s mining equipment, technology and services (METS) companies.
The inked Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) means that 99 per cent of Australian goods (by value) will enter Indonesia duty-free or under significantly improved preferential arrangements by 2020.
Effectively, this will add $35 billion to both economies.
Australia’s $90 billion METS sector can also own up to 67 per cent of contract mining and mine site preparation services.
Minerals Council of Australia (MCA) has voiced its support for the trade deal, particularly noting Indonesia’s potential to be the world’s fourth-largest economy by 2050.
“Under this agreement, Australia’s world-leading resources sector will have access to greater trade opportunities – increasing mineral and energy exports and creating more highly-paid, highly-skilled jobs,” Constable said.
“This agreement will enhance people-to-people connections between Indonesia and Australia, with working visas for Indonesians expanded from 1000 to 4100 per year. In addition, 200 Indonesians will have access to six-month training opportunities in Australia.”
According to the joint statement of Australia’s Prime Minister Scott Morrison and Minister for Trade Simon Birmingham, the agreement builds on multiple trade deals that led to Australia’s $22.2 billion record trade surplus in 2018.
In 2017, two-way trade between Australia and Indonesia stood at $16.5 billion, with Indonesia ranked as Australia’s 13th largest trading partner.
Morrison and Birmingham said they were committed “to fully ratifying the IA-CEPA as soon as possible”.