15 March 2019
INDONESIA: Free Trade Agreement Signed with Australia
The country has now formally signed a Free Trade Agreement (FTA) with Australia. Formally entitled the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), its wide remit includes trade in goods, trade in services, trade facilitation, investment and e-commerce. It is expected to come into force in early 2020 after it has been ratified by the parliaments of both countries.
While 85% of Australia’s exports currently enjoy duty-free access to Indonesia under the terms of the existing ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), IA-CEPA will remove duties (or introduce improved preferential arrangements) for almost all the remaining items. Similarly, with almost all Indonesia’s exports currently enjoying duty-free access to the Australian market under the terms of AANZFTA, the new agreement will eliminate any remaining tariffs.
Overall, the new FTA is seen as likely to open up new opportunities for Hong Kong companies with business interests and investments in either country. While both Hong Kong and Indonesia are FTA partners under the terms of the existing ASEAN-Hong Kong, China Free Trade Agreement (AHKFTA), Hong Kong has also concluded FTA negotiations with Australia, with the agreement expected to be signed at some point later this year.