Aust talks up sweet side of Indonesia deal

Australia hopes to conclude a trade deal with Indonesia as early as November, as it hit back at suggestions that agreements already struck were not "equal".

As Australia and Indonesia enter the home stretch towards securing a trade deal, both sides are talking up its sweet side, describing it as a "game-changer" for the countries' relationship.

Australian Trade Minister Steven Ciobo and his Indonesian counterpart Enggartiaso Lukita met in Jakarta on Wednesday and laughed at facing pressure from reporters from both countries for details about rumoured sticking points in the negotiations of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).

While remaining tight-lipped on details, they said they hoped to have the long sought after deal finalised as early as November.

However, both were keen to stress an "early outcome" from the deal: a reduction of Indonesia's tariff on the import of Australian raw sugar from eight to five per cent. Australia, meanwhile, will eliminate import duties on Indonesian herbicides and pesticides.

This was previously announced during President Joko Widodo's visit to Australia earlier this year to meet Prime Minister Malcolm Turnbull. But Mr Ciobo said Wednesday's news was "the completion of that announcement" with the mechanisms now in place to allow it to happen.

Australia's sugar industry has been at a disadvantage in Indonesia since 2015 when Thailand saw its import tariff drop down to five per cent.

The move, brings Australia back into a level playing field, Mr Ciobo said.

After the deal was first announced earlier this year, research fellow at the Lowy Institute Matthew Busch said it was hardly a "game changer" with Indonesia's sugar industry heavily state controlled.

Mr Ciobo, however, maintains it was "very reasonable to assume that Australian growers will recapture market share" in Indonesia.

The Australian sugar industry alliance was also confident on Wednesday, saying the deal provides an opportunity to increase exports to more than 1.25 million tonnes, up from 350,000 tonnes.

Mr Ciobo also rejected the suggestion that Indonesia was getting the better part of the deal, with the archipelago securing a complete cut in tariffs while Australia with pesticides had achieved only a reduction.

Other opportunities include opening up the market for Australian automobile suppliers, as well as a deal on Australia's skim milk powder which is used by Indonesian manufactures in condensed milk.

While trade talks have been continuing, challenges have cropped up with Indonesia complaining to the World Trade Organisation (WTO) over Australia's anti-dumping duties on imports of A4 copy paper.

"If you want smooth sailing than you shouldn't be in politics. If you want smooth sailing then you shouldn't be involved in international trade. There are always trade irritants. there are always challenges," Mr Ciobo said.


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Source: AAP


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