Indonesian trade minister in Australia for talks on global free trade
Updated
Trade Minister Mari Pangestu is part of the Indonesian delegation to Australia, comprising some 120 representatives, including 13 ministers, accompanying President Yudhoyono. Trade minister Dr Pangestu has been meeting with her Australian counterpart Simon Crean. Global free trade is a key topic, but so is a planned Indonesia-Australia free trade agreement, after a preliminary study showed it would result in billions of dollars worth of benefits.
Presenter: Linda Mottram
Speakers: Dr Mari Pangestu, Indonesian Trade Minister
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PANGESTU: Partly, it's perhaps growth and the types of products that we are exporting and importing to each other, but I do think that in the first instance, we already signed the ASEAN Australian-New Zealand FTA which will be implemented this year. So I think even though we don't have a bilateral FTA yet, I think with the ASEAN New Zealand FTA we believe that that will be already increase in trade, because around 92 per cent of the value of our imports going into Australia will be coming in at zero tariff and then for you the other way about 80 something per cent. So that is beginning this year. We hope that that will provide a boost for trade.
Now on the bilateral FTA, we had always talked about it as a sort of a sequencing issue where that's completely ASEAN, New Zealand and Australia FTA first iimplemented and then we certainly will be planning to continue with the bilateral FTA.
MOTTRAM: One of the issues officials in Australia have raised is a degree of nervousness in industry in Indonesia, after the ASEAN-China Free Trade Agreement came into force. How much nervousness is there?
PANGESTU: Well, I don't think it is particularly uniquely to Indonesia. I think a lot of countries after the 2009 downturn felt some anxiety about competitiveness basically. Basically it is the issue about competitiveness and it's confined to a number of sectors. It is not an overall nervousness or across all sectors. Because some sectors are actually benefiting a lot from trade, including with the ASEAN-China FTA agreement. I mean all the resource-based and agriculture-based products have actually increased quite a lot because of the FTA. So the sectors that are feeling the pressures of competition are the sectors like steel, like textiles and garments, Those are actually the two major ones that have expressed the greatest concerns and these are the sectors that face more the competition, especially with China. But you will find in other countries it's quite similar. So our answer to that is obviously how do we ensure that the issues of competitiveness will be addressed for each of these subsectors and that includes how to increase efficiency, how to improve infrastructure, how to give specific help to some of these industries. So I think this is something we need to address that it does not prevent us from implementing the ASEAN-China FTA on time as we have already done this year.
MOTTRAM: But is that an inhibitor on moving forward with the Australia-Indonesia FDA?
PANGESTU: No, no, it's more, the process is ongoing and as I said we wanted to complete the ASEAN Australian and New Zealand FTA first. Both sides agreed on that and then said next at the same time in parallel we had completed the joint study. So now we come into the next stage to prepare for the bilateral FDA and or one of the things we need to complete doing back home is to complete the process of socialisation to all the business sector on this FDA.
