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[News] Indonesia And Australia Sign Trade Agreement
Posted at: 01 March 2019

Indonesian Trade Minister Enggartiasto Lukita said the Indonesian government plans to sign the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) in March 2019.

Negotiations related to the IA-CEPA started back in 2010 and were finalized in August 2018 (and at some points in these years negotiations between both sides were stopped altogether amid diplomatic tensions). However, actual signing of the free trade deal was postponed beyond 2018 because in October 2018 Australian Prime Minister Scott Morrison said Australia is considering to recognize Jerusalem as the capital of Israel and to move its embassy to the holy city.

Morrison's comments prompted concern and criticism, especially from Arab countries and other countries with big Muslim populations, including Indonesia. Various ambassadors said Australia's plans could disturb the peace process, while they also warned that relations between Australia and Arab countries (or Islamic countries) could be negatively affected by moving the Australian embassy to Jerusalem. Indonesian Foreign Minister Retno Marsudi immediately responded saying Indonesia strongly opposes the move.

A final decision in December 2018 shelved plans to immediately shift the Australian embassy but the country did recognize West Jerusalem as Israel's capital.

In the January-November 2018 period, Indonesia had a USD $2.85 billion trade deficit in terms of Indonesia-Australia trade, improving from a USD $3.31 billion deficit in the same period one year earlier.

(source: Indonesia Investment)