2. IA-CEPA Background

This chapter examines the Comprehensive Economic Partnership Agreement between the Government of Australia and the Government of Indonesia (IA-CEPA). The treaty action was signed in Jakarta on 4 March 2019. It was tabled in the Parliament on 21 March 2019. The Committee’s inquiry lapsed at the dissolution of the 45th Parliament and the treaty action was rereferred to the Committee by the Minister of Foreign Affairs on 29 July 2019.
Negotiations for IA-CEPA began in 2010 following a joint feasibility study conducted in 2007 by Australia and Indonesia. After a pause in negotiations, these were relaunched in 2016.1 Negotiations were substantially concluded in August 2018.2

Overview and national interest summary

The National Interest Analysis (NIA) states that the IA-CEPA will bring both commercial and strategic benefits. It is intended to strengthen bilateral ties and provide a basis for deepening the trade and investment relationship with what Australia sees as an important strategic partner.3
The NIA emphasises the strategic importance of the proposed Agreement as well as the commercial benefits. It is expected to significantly contribute to Australia’s bilateral relationship with Indonesia and position Australia to tap into that country’s economic potential as its population and economy grow.4
The NIA points out that the IA-CEPA will also support Indonesia’s own economic growth agenda. It builds on Australia’s status as a partner of choice for Indonesia supported by long engagement, including through the development cooperation program, to help open up Indonesia’s economy and create a better business-enabling environment for both Indonesian and Australian businesses.5
Australia and Indonesia have broadly complementary economies, but the NIA suggests that the trade and investment relationship is ‘underdone’. Indonesia has a large population in excess of 260 million people, a growing middle class, and strong economic growth in excess of 5 per cent that is forecast to continue until 2020. Indonesia is projected to become the fifth largest economy in the world by 2030 and fourth largest economy by 2050 (ranking by purchasing power parity equivalent Gross Domestic Product (GDP)).6
According to the NIA, Australia has a strong position as an agribusiness supplier to Indonesia and has leading market positions in the provision of grains and meat. The NIA indicates that Australia’s capabilities in services, particularly education and training, healthcare, mining-related services, tourism services and in the development of infrastructure and resources, are highly relevant to the growth challenges facing Indonesia.7
However, the NIA maintains that the bilateral trading and investment relationship is not reaching its potential. Indonesia is Australia’s thirteenth largest trading partner and fourth in Association of Southeast Asian Nations (ASEAN). Indonesia is only Australia’s 10th largest goods export destination (2.3 per cent of Australian exports) and 12th largest services export market (2.0 per cent of Australian exports).8
The NIA states that the IA-CEPA is expected to build on and strengthen Australia’s existing arrangements with Indonesia, including filling gaps in areas that other trade agreements to which both countries are Parties do not cover. The NIA identifies a range of barriers that currently hamper the commercial relationship and that the IA-CEPA is expected to address, including:
restrictive regulatory practices (including restrictive import licencing);
inconsistent customs processes; and
non-tariff issues.9
Additionally, the NIA advises that Indonesia has a relatively closed services sector and the investment environment is challenging.10
The NIA expects the IA-CEPA to promote the development of a predictable, transparent and consistent business environment that will lead to the improvement of economic efficiency and the growth of trade and investment between the two countries. The NIA maintains that Australian exporters, investors and service providers will have significantly improved and more certain access to the growing Indonesian market.11

Reasons for Australia to take the proposed treaty action

The NIA concludes that not implementing the IA-CEPA would leave Australia’s exporters and investors at a competitive disadvantage in the largest ASEAN economy. Indonesia already has free trade in goods and services with other ASEAN economies and has just concluded negotiations with the European Free Trade Association. It is currently negotiating a free trade agreement with the European Union.12
The following summary of sectoral outcomes is taken from the NIA and the ARIA.


Australia and Indonesia are both Parties to the ASEAN Australia New Zealand Free Trade Agreement (AANZFTA). Under that Agreement, 98 per cent of Indonesian exports to Australia are duty free; however around 30 per cent of Australian exports to Indonesia are still affected by tariffs.13
Under IA-CEPA, 99.9 per cent of Australian goods exports to Indonesia will enter Indonesia duty free or under significantly improved and preferential arrangements.14
Indonesia will offer improved, and more certain, access for Australia on live cattle, feed grains and horticultural products such as citrus fruits and vegetables (carrots and potatoes). IA-CEPA will also offer better access for rolled steel coil, produced by BlueScope as a feedstock for its Indonesian manufacturing facilities.15
IA-CEPA contains a lower sugar tariff and Indonesia will progressively eliminate tariffs on most other products including frozen beef and sheep meat, dairy, and a range of manufactured steel, copper, plastic, automotive parts and machinery products.16


Indonesia’s commitments represent a significant improvement on its services commitments in AANZFTA. These include commitments on technical and vocational education allowing Australian Vocational Education and Training (VET) providers to establish certain majority Australia-owned joint ventures in Indonesia.17
The NIA states that Indonesia has offered its best ever commitments overall on services in any Free Trade Agreement (FTA). These commitments guarantee that Australian suppliers can establish majority-owned businesses with no geographic limitations, in sectors including private hospitals, tourism, telecommunications, architecture, engineering, construction, infrastructure and a range of mining and energy-related services.18


The NIA suggests that IA-CEPA should serve to increase Australian investment in Indonesia, which is currently low.19 IA-CEPA will deliver both general protections and investor-state dispute settlement (ISDS) provisions. This should generate greater Australian business interest in investing in the growing Indonesian market.20
According to the NIA, investor protections, including ISDS, are necessary in the challenging Indonesian investment environment. Indonesia presents risks for foreign investors, with an uncertain regulatory climate and increasing economic nationalism.21
ISDS between Australia and Indonesia is already available under AANZFTA and under Australia’s bilateral investment treaty with Indonesia, which entered into force in 1993, but those agreements lack the important safeguards contained in Australia’s more recent FTAs. Indonesia has a strong interest in the higher level of safeguards offered by ISDS under IACEPA because they provide increased protection of the government’s right to regulate in the public interest.22
The ISDS provisions in IA-CEPA include safeguards equivalent to the best Australia has agreed to date. The NIA maintains that these provisions provide a better balance between the protection of investors and ensuring the government’s right to regulate in the public interest.23
According to the NIA, in IA-CEPA, an investor’s basis for challenging legitimate Australian regulatory measures is limited by carve-outs (nonconforming measures), exceptions and other protections for government policy setting. Modern procedural safeguards, such as provision for expedited preliminary objections and costs orders, are included to contain costs and deter frivolous claims. The agreement also carves out any public health measure, including those related to the regulation of tobacco, from the scope of ISDS.24

Improving the business environment

Non-tariff issues, variable customs procedures, red tape and WTO (World Trade Organisation)-inconsistent import licensing arrangements are a major obstacle for many Australian businesses in the Indonesian market.25
According to the NIA, IA-CEPA includes a built-in agenda to include appropriate economic cooperation to facilitate trade and investment and secure support in the Indonesian system.26 Australia and Indonesia intend to use the IA-CEPA economic cooperation program in key areas of mutual interest, such as strengthening links between Australian exporters and Indonesian processors. The cooperation program is also expected to maximise the benefits of IA-CEPA’s outcomes in key services sectors such as education, health and tourism.27
IA-CEPA aims to improve conditions for Australian exporters in a number of ways. It guarantees import licences for a number of key products. In addition, IA-CEPA includes a chapter on non-tariff measures (Chapter 3). This will set up a cooperative mechanism to help deal with non-tariff measures in the Indonesian market. IA-CEPA also supports improvements to customs procedures and provides assistance linked to Indonesia’s implementation of the WTO Trade Facilitation Agreement.28
Australia and Indonesia have agreed to a comprehensive set of domestic regulation disciplines for trade in services to help address behind-the-border barriers such as delays in processing licences and permits. These build on the rules contained in AANZFTA. Australia and Indonesia have agreed to establish a mechanism to promote professional mutual recognition arrangements between relevant bodies and to improve licencing and certification processes for professionals.29
The Electronic Commerce Chapter (Chapter 13) reflects the increasing importance of the internet for business, including commitments to ensure service suppliers and investors can transfer information into and out of Indonesia. It will lock in Indonesia's planned liberalisation of its current data localisation requirements. The Chapter builds on AANZFTA in several other ways: it prohibits governments from requiring companies to release their software source code as a condition of importation, sale or distribution; and it contains enhanced commitments on paperless trading and electronic signatures.30
The Competition Policy Chapter (Chapter 16) is designed to ensure that the trade and investment liberalisation achieved across IA-CEPA is not undermined by anti­competitive practices. The Chapter includes an obligation on Parties to adopt or maintain consumer protection laws to proscribe the use in trade of misleading practices, or false or misleading descriptions.31
The Transparency Chapter (Chapter 19) promotes greater transparency in the making and implementation of laws, regulations and government decisions to facilitate predictability and ease of doing business. It requires Parties to establish or maintain impartial and independent tribunals or procedures for the review of final administrative actions. Australia already complies with the Chapter’s requirements.32

Supporting the strategic partnership

The NIA states that Indonesia is one of Australia’s most important bilateral relationships. Cooperation spans political, economic, security, development, education and people-to-people ties.33
In recognition of the close relationship, Australia and Indonesia signed the Comprehensive Strategic Partnership (CSP) on 31 August 2018. The CSP has five pillars:
Enhancing Economic and Development Partnership;
Connecting People;
Securing Our and the Region’s Shared Interests;
Maritime Cooperation; and
Contributing to Indo-Pacific Stability and Prosperity.34
According to the NIA, IA-CEPA aims to play a direct role in supporting the first pillar of the CSP, but will also make important contributions to the other four.35
The NIA also notes that IA-CEPA has been designed to contribute to the three Objectives of Australia’s Aid Investment Plan:
Effective Economic Institutions and Infrastructure;
Human Development for a Productive Society; and
An Inclusive Society through Effective Governance.36
Additionally, the NIA points out that several important telecommunications cables connecting Australia to the rest of the world pass through Indonesian waters. The IA-CEPA Telecommunications Chapter (Chapter 11) includes specific obligations designed to improve the transparency and predictability of Indonesia’s regulation of the installation, maintenance and repair of submarine telecommunications cables in its waters, protecting Australia’s important strategic interests in this area.37


The following summary is taken from the NIA and is provided in some detail for the benefit of members.
IA-CEPA consists of 21 Chapters with associated Annexes. IA-CEPA is consistent with Australia’s other international agreements, including the WTO. Chapter 1 (Initial Provisions and General Definitions) provides that the IA­CEPA will coexist with Parties’ rights and obligations in other agreements to which they are also a Party. The obligations in IA-CEPA align with those made by Australia to other FTA partners.38


Upon entry into force of IA-CEPA, Australia is required to eliminate all tariffs on imports of goods from Indonesia.39
The provisions contained in IA-CEPA’s goods related chapters (Chapters 28) reaffirm existing rights and obligations under the relevant WTO Agreements. These chapters maintain the Parties’ rights and obligations under the WTO Agreements with regard to the application of safeguards, anti-dumping and countervailing measures. They include commitments on import and export restrictions and other non-tariff barriers that may otherwise present hurdles to Australian goods entering Indonesia.40
IA-CEPA establishes a mechanism for the review of non-tariff measures raised by either Party. It also provides for dialogue on trade remedies to enhance transparency and understanding.41
The Chapter on Rules of Origin (Chapter 4) specifies the ways in which a good imported from a Party is eligible for the preferential tariff of the Agreement. Product Specific Rules of Origin for IA-CEPA taken as a whole are more trade facilitative than those in AANZFTA, provide for choice of method to establish origin, and build on Australia’s best practice to date so as to enable regional value chains. The origin procedures provide for use of familiar AANZFTA­style certificates of origin, but allow for Parties to also permit declarations by exporters.
The Chapter on Sanitary and Phytosanitary (SPS) measures (Chapter 7) reaffirms the Parties’ commitments in the WTO SPS Agreement. It establishes a sub-committee to promote cooperation on SPS issues. It does not alter the SPS controls on products entering Australia.42
The Chapter on Technical Barriers to Trade (Chapter 8) reaffirms the Parties’ WTO TBT Agreement obligations and extends the level of commitment on cooperation in international standards, guidelines and recommendations. The chapter establishes a sub-committee to promote cooperation on TBT issues. It does not alter Australia’s standards and conformance regime.43


The Trade in Services, Financial Services and Telecommunications Chapters (Chapters 9-11) build on existing WTO and AANZFTA services commitments giving Australian service suppliers better access to the Indonesian market and greater certainty about the rules that will apply to them in Indonesia.44
The Trade in Services Chapter (Chapter 9) contains a comprehensive section on domestic regulation, which sets out a common framework for the regulation of service suppliers in the territory of each Party. These rules help address behind-the-border barriers such as delays in processing licenses or other permits required to supply a service.45
There is also a Recognition Article, based on existing WTO language, which gives each Party the right to recognise qualifications obtained in another country should they wish to do so, but does not oblige Australian professional bodies to recognise Indonesian qualifications. There is also a specific Annex on Professional Services to facilitate cooperation, including with non­government professional bodies, on recognition of professional qualifications, licensing and registration requirements.46
The Financial Services Chapter (Chapter 10) will help to ease some of the regulatory burdens Australian financial services firms face when operating in Indonesia. For example, the Chapter includes provisions that promote transparency in the application procedures necessary to supply financial services and improves access to self-regulatory organisations, where access is necessary to supply a financial service in Indonesia. Australia and Indonesia will also seek to permit financial institutions to supply new financial services in each other’s territory.47
The Telecommunications Chapter (Chapter 11) commits Australia and Indonesia to transparent and pro-competitive telecommunications regulation, including ensuring that incumbent telecommunications companies provide other suppliers with access to services and key infrastructure on reasonable terms and conditions. The Chapter also includes specific obligations designed to improve the transparency and predictability of Indonesia’s regulation of the installation, maintenance and repair of submarine telecommunications cables in its waters. Several telecommunications cables connecting Australia to the rest of the world pass through Indonesian waters.48
Services and investment market access commitments are subject to a range of carve-outs in which the Parties preserve their right to regulate in the national interest. Australia has retained the right to introduce new regulations for sensitive issues and sectors, including preferences for indigenous peoples; public services including education (noting the right to preserve full policy flexibility on primary education services); health and social services; cultural industries; and audio-visual services. Australia has also reserved the right for governments to impose conditions should they choose to privatise government assets or contract out services.49

Movement of Natural Persons

The Movement of Natural Persons Chapter (Chapter 12) applies to measures regulating the temporary movement between Australia and Indonesia of skilled professionals, including those engaged in trade in goods, the supply of services or the conduct of investment.50
The Chapter requires each party to:
promptly process completed applications for visas or other immigration formalities from the other Party;
provide information, upon request, about the status of applications;
ensure that fees for the processing of an application for a visa or other immigration formality are reasonable;
provide information on types of visas available, the documentation and other conditions that must be met and the appropriate method for submitting an application for a visa; and
establish or maintain appropriate mechanisms for responding to enquiries about measures relating to temporary entry for business persons of the other Party.51
Under the Chapter, each Party makes specific commitments guaranteeing access for specific categories of business persons who, provided they fulfil visa eligibility requirements, will be permitted to enter and temporarily stay in the other country. Those categories cover business persons undertaking activities such as attending meetings, conferences and trade fairs, setting up a business or an investment, or working in an overseas branch of their office.52
Australia has undertaken to waive labour market testing for Indonesian business visitors, intra-corporate transferees and independent executives. These are the same categories on which Australia has existing commitments not to impose labour market testing for Indonesians under the WTO and AANZFTA. Australia has not made any commitments on Indonesian contractual service suppliers (skilled workers employed by a company in either Australia or Indonesia to work temporarily in Australia to fulfil a contract).53
The Chapter does not create any obligations in relation to citizenship, nationality, residence or employment on a permanent basis. The Chapter recognises the right of Australia and Indonesia to regulate the entry of natural persons into their territories and to require foreign workers to meet all relevant skill, qualification or experience requirements in force in the country where they are working temporarily.54

Electronic Commerce

The Electronic Commerce Chapter (Chapter 13) commits Australia and Indonesia to ensure service suppliers and investors can transfer information across borders by electronic means. The Chapter also contains commitments to not make existing measures that require data to be stored locally any more restrictive, and automatically include improvements to these measures into the Agreement.55
The Chapter retains the right of a Party to impose conditions or restrictions on the cross-border transfer of information and data storage in order to achieve public policy objectives, provided that such restrictions are not arbitrary or unjustifiable discrimination or a disguised restriction on trade. These obligations do not prevent a Party from adopting or maintaining any measures that it considers necessary for the protection of its essential security interests and do not apply to information held or processed on behalf of a Party.56
The Chapter prohibits Parties from requiring the transfer of (or access to) source code of software owned by a person of another Party as a condition of importation, sale or distribution of such software. This obligation does not affect requirements relating to patent applications or prevent a Party from adopting or maintaining any measures that it considers necessary for the protection of its essential security interests.57
Under the Chapter, Australia and Indonesia have made commitments to not deny the legal validity of electronic signatures and accept the electronic versions of trade documents as the legal equivalent of paper documents. These obligations allow Parties to have contrary requirements where provided for under law.58
The Chapter contains commitments to promote confidence in the online environment. These include for Australia and Indonesia to adopt or maintain a legal framework for privacy protection, and consumer protection laws that proscribe fraudulent and deceptive commercial activities that are harmful to online consumers. The Parties have also made commitments on addressing unsolicited commercial electronic, or ‘spam’, messages.59
Under the Chapter, Australia and Indonesia have also agreed to cooperate to support electronic commerce, including on cyber security and on assisting micro, small and medium-sized enterprises to use electronic commerce. The Chapter also contains transparency commitments, including that Parties will publish information on the rights and protections provided to electronic commerce users and how businesses can comply with legal requirements.60


The Investment Chapter (Chapter 14) enhances market access and protections for investors from both Parties. The key obligations in this Chapter include:
non-discrimination through national treatment and most-favoured-nation (MFN) provisions: national treatment obliges a Party to afford equal treatment to foreign investors and local producers where there are like circumstances and MFN obliges a Party to afford no less favourable treatment to foreign investors of the other Party than investors from non­Parties in like circumstances;
minimum standard of treatment (MST): the foreign investor/investment to be treated in accordance with customary international law standards of fair and equitable treatment and full protection and security;
expropriation and compensation: the obligation not to expropriate a covered investment unless expropriation is undertaken in a non-discriminatory manner, for a public purpose and upon payment of prompt, adequate, and effective compensation;
transfers: obligation to allow all transfers relating to a covered investment to be made freely and without delay into and out of its territory;
performance requirements: lists the types of requirements, for example to purchase, use or accord a preference to goods produced in a Party’s own territory, which a Party agrees not to impose as a condition of establishing or operating an investment in the other Party; and
senior management and board of directors: limitations on requiring the appointment of particular nationalities to senior management positions in businesses that are covered investments.61
Australia has reserved the right to maintain its existing foreign investment review process. IA-CEPA does not increase the thresholds for screening of Indonesian investments above the current levels. Australia has also reserved the right to strengthen its regulations for investments above the current screening thresholds in sensitive sectors such as agricultural land and agribusiness.62
The agreement includes modern ISDS provisions, with appropriate procedural and substantive safeguards that build on the existing ISDS mechanism between Australia and Indonesia in AANZFTA.63
The inclusion of ISDS means that where an investor from one Party alleges loss or damage as a consequence of the other Party breaching a commitment in the Investment Chapter, the investor can commence arbitration against that Party in a tribunal. An investor's basis for challenging legitimate Australian regulatory measures is limited by carve-outs, exceptions and other protections for Australian policy settings.64
An ISDS claim concerning IA-CEPA may only be brought in relation to commitments in the Investment Chapter. ISDS cannot be used to enforce other provisions of the agreement.65
IA-CEPA preserves each Government’s right to regulate in the public interest:
there is a public health carve out ensuring that public health measures are outside the scope of ISDS, including for Australia those relating to tobacco, the Pharmaceutical Benefits Scheme, Medicare Benefits Scheme, Therapeutic Goods Administration and Office of the Gene Technology Regulator;
Australia's foreign investment framework, including decisions of the Foreign Investment Review Board, cannot be challenged under ISDS;
Australia reserves the right to maintain existing and introduce new measures in key policy areas, including:
social services established or maintained for a public purpose, such as social welfare, public education, health and public utilities; and
measures with respect to creative arts, Indigenous traditional cultural expressions and other cultural heritage; and
general exceptions also apply to the Investment Chapter.66
The ISDS mechanism in IA-CEPA also includes procedural safeguards to enhance the arbitration process, including:
expedited review of claims that are frivolous or manifestly without legal merit;
mechanisms to deter unmeritorious claims, including through the award of costs against a claimant;
the ability of the Parties to issue interpretations of the Agreement, which must be followed by ISDS tribunals;
time limits on bringing a claim; and
a requirement for arbitrators to comply with rules on independence and impartiality, including on conflicts of interests.67

Economic cooperation

Cooperation will be important for implementing IA-CEPA and maximising its ongoing benefits. The Economic Cooperation Chapter (Chapter 15) seeks to build on the existing Australia-Indonesia development partnership and establishes a Committee on Economic Cooperation. The Committee’s activities will include:
developing medium term priorities for economic cooperation for consideration and approval by the Joint Committee;
developing an Annual Work Program for consideration and approval by the Joint Committee, including coordinating and prioritising proposals for economic cooperation from the other committees established under the Agreement; and
overseeing and reviewing the implementation of the Annual Work Program to assess its overall effectiveness and contribution to the implementation of this Agreement.68

Competition and transparency

The Competition Policy Chapter (Chapter 16) seeks to ensure that the trade and investment liberalisation achieved across IA-CEPA is not undermined by anti­competitive practices. The Chapter includes an obligation on Parties to adopt or maintain consumer protection laws to proscribe the use in trade of misleading practices, or false or misleading descriptions. The Chapter recognises the importance of consumer protection policy and enforcement to the creation of efficient and competitive markets and to enhancing consumer welfare. The Chapter recognises the value of the Parties making their competition enforcement policies as transparent as possible.69
The Transparency Chapter (Chapter 19) promotes greater transparency in the making and implementation of laws, regulations and government decisions to facilitate predictability and ease of doing business. It requires Parties to establish or maintain impartial and independent tribunals or procedures for the review of final administrative actions. Australia already complies with the Chapter’s requirements.70

General exceptions

IA-CEPA includes a number of exceptions to ensure the Parties preserve their ability to take measures they consider necessary for their essential security. An FTA-wide exception allows Australia and Indonesia to take any action they consider necessary for the protection of their essential security interests relating to a number of issues. There are also specific exceptions in the e-commerce chapter (to allow restrictions on data transfers and data localisation requirements). Australia’s schedule of services and investment commitments also includes a broad carve-out from the key Investment and Services Chapter obligations to allow any action Australia considers necessary for the protection of its essential security.71
The General Provisions and Exceptions Chapter (Chapter 17) includes a series of public policy exceptions to allow Parties to adopt or enforce measures otherwise inconsistent with the Agreement in certain circumstances (such as to protect human, animal or plant life or health). The Chapter also permits the Parties to impose temporary safeguard measures in the event (or threat) of serious balance of payments and external financial difficulties. Taxation measures are also exempt from the Agreement, with some limited exceptions.72

Institutional provisions

The Institutional Provisions Chapter (Chapter 18) establishes the administrative provisions necessary for the operation and review of the Agreement, including the processes by which the Agreement will enter into force, may be subsequently amended or terminated, and how the Agreement will co-exist with existing treaties between the Parties. This Chapter also establishes a binding State-to-State dispute settlement mechanism, drawing on previous FTAs and the WTO system, and a committee structure to manage the ongoing implementation of the Agreement.73

Side Letters and Memoranda of Understanding

Alongside IA-CEPA, Australia negotiated two treaty-level side letters:
Side Letter between Australia and Indonesia on Economic Cooperation under IA-CEPA: This side letter and its attachment set out the medium term objectives for cooperation between Indonesia and Australia under IACEPA.
Technical and Vocational Education and Training (TVET) side letter: This letter provides that Indonesia and Australia will use the provisions of IA-CEPA to undertake mutually agreed economic cooperation in the TVET sector in order to help Indonesia build a highly-skilled, industryready workforce.74
There are three other associated side letters and two Memoranda of Understanding (MOU), all of less than treaty status:
Skills Exchange MOU: This MOU sets out the details of the reciprocal skills exchange between Australia and Indonesia.
Workplace-based training MOU: This MOU commits Australia to granting annually up to 200 visas to Indonesian nationals allowing temporary stays for a period of up to six months for the purpose of undertaking workplace-based training in specified sectors.
Indonesia Working Holiday Visa letter: This letter outlines Australia’s offer to increase the current annual cap of Work and Holiday visas for Indonesian Nationals to 4,100 on the first day of the month after IACEPA enters into force, and to increase the cap to 5,000 over the following five years.
Side letter on Mutual Recognition Arrangements in Engineering: This letter outlines Australia and Indonesia’s mutual commitment to facilitate cooperation between their relevant bodies on assisting Indonesia to reach internationally benchmarked standards for engineering education, with a view to facilitating mutual recognition of the qualifications of professional mining engineers in the future.
Health side letter: This letter outlines Australia and Indonesia’s mutual commitment to undertake actions that strengthen their economic partnership in the health sector, undertaking work on strengthening Health Professional standards and competitiveness in the Indonesian health sector and encouraging Australian investment in the Indonesian health sector.75
Each of these will take effect on the date that IA-CEPA enters into force for both Australia and Indonesia.76


According to the NIA the following legislative changes will be required before IA-CEPA can enter into force:
the Customs Act 1901 and the Customs Tariff Act 1995 and relevant customs regulations will need to be amended to incorporate the preferential tariff rates that will apply to goods imported from Indonesia under IA-CEPA;
either new legislation or changes to the Export Control Act 1982 will be required to provide authority to administer a tariff rate quota on steel; and
a Ministerial determination will need to be made under section l40GBA of the Migration Act 1958 to implement the IA-CEPA exemptions from labour market testing for Indonesian intra-corporate transferees and independent executives (these commitments re-affirm those made by Australia at the WTO).77


The NIA states that there are no costs or losses of tariff revenue for Australia associated with the entry into force of IA-CEPA because Australia will have already eliminated all tariffs under AANZFTA by the time IA-CEPA enters into force.78
Australia will provide Indonesia with economic cooperation to support its implementation of IA-CEPA and to support further liberalisation efforts in Indonesia. According to the NIA, this will be drawn from the existing bilateral development cooperation program.79
The NIA expects the IA-CEPA to enable Australian exporters to increase the value of their sales to Indonesia and contribute to economic growth in both countries.80

  • 1
    Indonesia-Australia Comprehensive Economic Partnership Agreement Analysis of Regulatory Impact on Australia, 5 December 2018, hereafter referred to as ARIA, para 3.
  • 2
    ARIA, para 5.
  • 3
    National Interest Analysis [2019] ATNIA 12 with attachments Comprehensive Economic Partnership Agreement between the Government of Australia and the Government of Indonesia (Jakarta, 4 March 2019) [2019] ATNIF 17, hereafter referred to as the NIA, para 4.
  • 4
    NIA, para 5.
  • 5
    NIA, para 6.
  • 6
    NIA, para 7.
  • 7
    NIA, para 8.
  • 8
    NIA, para 9.
  • 9
    NIA, para 10; ARIA, paragraphs 18–26.
  • 10
    NIA, para 10; ARIA, paragraphs 23–24.
  • 11
    NIA, para 11.
  • 12
    NIA, para 14; ARIA, para 13.
  • 13
    NIA, para 16.
  • 14
    NIA, para 17.
  • 15
    NIA, para 18; ARIA, paragraphs 125–126.
  • 16
    NIA, para 19; ARIA, para 127; For further information on the effect of the Agreement on goods see the ARIA, paragraphs 158–178.
  • 17
    NIA, para 21; ARIA, para 129.
  • 18
    NIA, para 22; ARIA para 130; For further information on the effect of the Agreement on services see paragraphs 179–186.
  • 19
    NIA, para 23.
  • 20
    NIA, para 24.
  • 21
    NIA, para 25; ARIA, para 134.
  • 22
    NIA, para 26; ARIA, para 135.
  • 23
    NIA, para 27; ARIA, para 136.
  • 24
    NIA, para 28; ARIA, para 137.
  • 25
    NIA, para 29; ARIA, para 138.
  • 26
    NIA, para 31.
  • 27
    NIA, para 30.
  • 28
    NIA, para 32; ARIA, para 141.
  • 29
    NIA, para 33; ARIA, para 142.
  • 30
    NIA, para 34; ARIA, para 143.
  • 31
    NIA, para 35; ARIA, para 144.
  • 32
    NIA, para 36; ARIA, para 145.
  • 33
    NIA, para 37; ARIA, para 149.
  • 34
    NIA, para 38; ARIA, para 150.
  • 35
    NIA, para 38.
  • 36
    NIA, para 39; ARIA, para 151.
  • 37
    NIA, para 40; ARIA, para 152.
  • 38
    NIA, para 41.
  • 39
    NIA, para 42.
  • 40
    NIA, para 43.
  • 41
    NIA, para 44.
  • 42
    NIA, para 46.
  • 43
    NIA, para 47.
  • 44
    NIA, para 48.
  • 45
    NIA, para 49.
  • 46
    NIA, para 50.
  • 47
    NIA, para 51.
  • 48
    NIA, para 52.
  • 49
    NIA, para 53.
  • 50
    NIA, para 54.
  • 51
    NIA, para 55.
  • 52
    NIA, para 56.
  • 53
    NIA, para 57.
  • 54
    NIA, para 58.
  • 55
    NIA, para 59.
  • 56
    NIA, para 60.
  • 57
    NIA, para 61.
  • 58
    NIA, para 62.
  • 59
    NIA, para 63.
  • 60
    NIA, para 64.
  • 61
    NIA, para 65.
  • 62
    NIA, para 66.
  • 63
    NIA, para 67.
  • 64
    NIA, para 68.
  • 65
    NIA, para 69.
  • 66
    NIA, para 70.
  • 67
    NIA, para 71.
  • 68
    NIA, para 72.
  • 69
    NIA, para 73.
  • 70
    NIA, para 74.
  • 71
    NIA, para 75.
  • 72
    NIA, para 76.
  • 73
    NIA, para 77.
  • 74
    NIA, para 78.
  • 75
    NIA, para 79.
  • 76
    NIA, para 80.
  • 77
    NIA, para 81.
  • 78
    NIA, para 82.
  • 79
    NIA, para 83.
  • 80
    NIA, para 84.

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