Australia-Indonesia trade deal needs more political will to succeed, negotiator says

Australia-Indonesia trade deal needs more political will to succeed, negotiator says

Australia-Indonesia trade deal needs more political will to succeed, negotiator says

Updated 22 September 2017, 7:05 AEST

Indonesia is pushing for Australia to open its doors to Indonesian workers as the two countries edge closer to securing a bilateral trade deal by the end of the year, with Jakarta's chief negotiator saying more political will is needed to overcome barriers.

As Australia and Indonesia edge closer to securing a bilateral trade deal, a lack of confidence in each other has been one of the major barriers.

That is according to Indonesia's chief trade negotiator Iman Pambagyo, who in an interview with the ABC, said more political will and guidance from the leaders of the two countries will be needed for an agreement to be secured.

He said Australia would also need to open its doors to Indonesian workers.

"I think between now and then it seems that we lack confidence in each other," Mr Pambagyo, the director-general for International Trade Negotiations, said.

"But I think with the visit between the two ministers the atmosphere is getting better and better."

Trade Minister Steve Ciobo was in Jakarta this week for the 17th meeting with his Indonesian counterpart Enggartiaso Lutika.

The ministers announced a new self-imposed November deadline for the deal, a month earlier than had previously been outlined, but neither would comment on the details of negotiations.

Both countries say it will be a "win, win" agreement, but that can only be tested once the details are unveiled.

It is hard to fathom that Indonesia will give too much away; the nation has always been protectionist and President Joko Widodo has done nothing to rid the country of that reputation.

In fact, since he came to the presidency in 2014, import tariffs on a range of goods have been increased.

"I should admit that we sometimes send the wrong signal to our partners not only to Australia but to our negotiating partners," Mr Pambagyo said.

Deal would involve training Indonesian workers in Australia

The chief negotiator said a key element of the deal for Indonesia would be training for Indonesian workers across a range of sectors including health, tourism and IT.

For instance, the training of Indonesian nurses would take place in Australia, although there was concern how it would succeed unless they had strong English skills.

"I understand that it might be quite challenging for Australia to just open its doors to our workers to work in Australia but I think we can find some ways to deal with it," he said.

Whether what eventuates is a "free" trade deal in the true sense is unlikely, both Governments prefer to stick to the official, clunky title the "Indonesia-Australia Comprehensive Economic Partnership Agreement", or IA-CEPA.

Already Australia has removed altogether the tariff on herbicides and pesticides coming from Indonesia, while Indonesia will reduce to 5 per cent a tariff on Australian raw sugar.

Two-way trade between Australia and Indonesia is remarkably low at around $15 billion.

Indonesia, a nation of 250 million people, is Australia's 12th-largest trading partner.

Mr Pambagyo could not quantify by how much the deal would boost the dollar figure, and said the focus should be more on investment and people-to-people links than on the trading of goods.

"We have to find the right button for the negotiators to accelerate the process of negotiation," he said of the trade talks.

The deal, regardless of detail, will be seen as a significant step in the bilateral relationship and a sign of it strengthening.