NZ has taken successful action through the World Trade Organisation against the Indonesian measures.
“Indonesia is one of the largest economies in the world and bolstering the economic ties between our nations will lead to even greater opportunities for Australian businesses,” Australian Trade Minister Simon Birmingham said.
In November Australia also concluded a free-trade deal with Hong Kong.
The economic partnership with Indonesia is particularly a major boost for Australian farmers with the grains, live cattle, dairy and horticulture sectors to benefit from greater certainty of access and lower tariffs.
As a result, Australian farmers will be able to export 500,000 tonnes of feed grains such as wheat into Indonesia tariff free.
“This is a significant boost for the Australian wheat industry, building on our substantial milling wheat exports,” he said.
It will allow 99% of Australia’s goods exports to enter Indonesia duty free or with significantly improved preferential arrangements. All Indonesia’s goods exports will enter Australia duty free.
“As one of the fastest growing economies in the Indo-Pacific, Indonesia presents a significant opportunity for Australian businesses.
“By some estimates Indonesia will be the world’s fifth-largest economy by 2030 and IA-CEPA ensures that Australia is well-placed to deepen economic co-operation and share in Indonesia’s growth,” he said.
Indonesia will guarantee automatic issue of import permits for key products such as live cattle, frozen beef, sheep meat, feed grains, rolled steel coil, citrus products, carrots and potatoes. Import licences are a major irritant for many Australian exporters into Indonesia.
The deal builds on the ASEAN-Australia-New Zealand Free Trade Agreement to provide better and more certain access to the Indonesian market for Australian exporters.
Negotiations started in 2010 but lapsed until revived in 2016.
Hong Kong was Australia’s twelfth largest trading partner overall in 2017, with total two-way trade in goods and services worth $18.8 billion. The deal will guarantee entry for all Australian goods at zero tariffs.
Australia has also concluded a free-trade deal with Peru and the Pacific Agreement on Closer Economic Relations (PACER) Plus.
It is negotiating deals with the European Union, Gulf Co-operation Council, India, the Pacific Alliance and the Chinese-led Regional Comprehensive Economic Partnership. It lists a deal with Britain as a prospective agreement.
It has existing deals with China, Japan, Republic of Korea, New Zealand, Singapore, Thailand, United States, Chile and Malaysia.
Indonesian market snapshot
GDP: US$1.02 trillion (2017)
GDP per capita: US$3,876 (2017)
GDP growth: 5.1 per cent (2017)
Population: 262.0 million (2017)
Trade with Australia: A$16.5 billion (2017)
