Thursday, January 24th, 2019

Australia Indonesia free trade deal to be signed next week

Australian Prime Minister Scott Morrison and President Joko Widodo will both be in Singapore to witness the historic signing by off by trade ministers Simon Birmingham and Enggartisto Lukita.


A senior source in Jakarta, who asked not to be named, confirmed “if things go as planned, it will be on the morning of November 14”.

The source said that translation of the text into Bahasa Indonesian had been completed, and that the “legal scrubbing” process – which ensures the deal complies with local laws in both countries – has been finished too. Two other sources confirmed the signing was planned for next week.

The details of the free trade deal, which will boost Australian exports of beef and wheat and open the Indonesian market up to Australia healthcare and education providers, were agreed in August.

Political blow back over the embassy proposal in Indonesia, the world’s largest Muslim-majority nation, has been relatively restrained, but opposition could become more serious if Australia does decide to go ahead with the Jerusalem embassy move.

Last week, Jakarta’s former top diplomat in Canberra Nadjib Riphat Kesoema said he was “shocked” by the embassy proposal and urged Australia to adopt foreign policies that were more independent of the US.

Lowy Institute non-resident fellow Matthew Busch said the signing of the much-delayed deal would be good news for the Morrison government and the bilateral relationship, “but the Indonesians have been very clear that this embassy move is a very important issue for them and it could become a domestic issue for their government”.

“If Australia pressed ahead after the review of the location of the embassy in Israel there is no guarantee that the free trade deal road map would be adhered to,” he said.

Mr Busch said it was possible that ratification of the free trade deal – formally known as the Indonesia-Australia Comprehensive Economic Partnership Agreement – could be delayed by the Indonesian parliament, given domestic political sensitivities over the status of Palestine.

With Indonesians due to head to the polls in April 2019 to vote in presidential and parliamentary elections, it is also possible opposition parties could stir protests over the deal – as occurred when US President Donald Trump announced his country would move its embassy to Jerusalem – and cause a major headache for Mr Widodo.

The Australian trade deal was due to be signed at a recent conference in Bali on the health of the world’s oceans but was delayed.

Last week, former prime minister Malcolm Turnbull warned after meeting Mr Widodo that moving the embassy would meet a “very negative reaction” in Indonesia. He said, however, that he expected the trade deal would be signed in a matter of weeks.

James Massola is south-east Asia correspondent, based in Jakarta. He was previously chief political correspondent for The Sydney Morning Herald and The Age, based in Canberra. He has been a Walkley and Quills finalist on three occasions.