1. Introduction

Indonesia is our largest neighbour, yet the potential of our trade and investment relationship has not yet been fully realised. Despite our geographic closeness and the strong relationships our countries share through our people, neither country ranks the other as a top ten trading partner.
Australia and Indonesia also have many complementary goods and services that, with the right kind of innovative partnerships, could create a new joint regional powerhouse. Indonesia’s economic forecasts estimate a strong growth in its middle class to 2030 this offers significant opportunities for Australian agricultural trade, education and tourism.
While Australia and Indonesia have a great deal to offer each other in terms of trade and investment growth a trade agreement has been in negotiation for nearly a decade and negotiations have had a significant period of stagnation in that time. Both countries have now committed to completing an agreement by the end of 2017 and significant work has been undertaken in recent months towards this goal.
Submissions to this inquiry have been supportive of a strong, forward-thinking, innovative trade agreement that recognises both existing and emerging markets being finalised without delay.
As such, the Committee made the decision not to delay the issuing of this report through the conduct of a lengthy inquiry. Instead it has considered the submissions put to this inquiry and had regard to submissions made to the Indonesia-Australia Comprehensive Economic Agreement (IA-CEPA) process.
The work undertaken over a number of years by the Indonesia-Australia Business Partnership Group (IA-BPG)1 comprehensively sets out the opportunities for the future of the relationship between both countries.
The Committee commends the IA-BPG on this work and has not sought to replicate it through this inquiry. Instead, the Committee has surveyed the existing trade and investment relationship with Indonesia and discusses areas where it feels Australia can benefit from an enhanced trade relationship.

Conduct of the inquiry

The inquiry was referred by the Minister for Trade, Tourism and Investment on 29 November 2016. The Committee sought and received submissions from state and federal government agencies, private industry and industry groups. Submissions are listed at Appendix A.
The Committee held a number of public hearings with Government and industry representatives. Witnesses before public hearings are listed at Appendix B.

Structure of the report

Chapter 2 outlines Australia’s current goods and services trade and investment relationship with Indonesia, and discusses the challenges currently existing in this relationship.
Chapter 3 discusses the IA-CEPA and discusses the future of Australia’s trading relationship with Indonesia. This chapter makes a range of recommendations with a view to supporting mutual growth, maximising our comparative advantages and cooperative opportunities.

  • 1
    IA BPG, August 2016, Two neighbours, partners in prosperity, available at <https://www.acci.asn.au/resources/two-neighbours-partners-prosperity-indonesia-australia-business-partnership-group-submissi>

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