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12/1/2015 Trade deal recognises the neighbour we cannot ignore | afr.com
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OPINION Dec 1 2015 at 12:00 AM Updated Dec 1 2015 at 12:00 AM
Trade deal recognises the neighbour we cannot ignore
SAVE ARTICLE PRINT REPRINTS & PERMISSIONS
Andrew Robb and Kusuma Habir, from the Indonesian Embassy in Canberra, during the Indonesia BusinessSummit 2015.
by Andrew Robb
Indonesia has come an extraordinarily long way over the last 15 years.
Two years after the Asian financial crisis in 1997, Indonesia's gross domestic product
was just $75 billion. Its gross domestic product has since grown to reach $1.2 trillion
today, while over the same period, the size of the Indonesian middle class has swelled
from 4 million to about 50 million.
For Australia, Indonesia with its 250 million people – more than half of whom are under
30 – and its rising middle class, is a market and neighbour we simply cannot afford to
ignore. The growth opportunities are immense – twoway trade with Indonesia is
about $16 billion, a tenth of that with China.
With this in mind, there is a renewed focus on how we can work together on areas of
mutual benefit. We are determined to grow businesstobusiness links and build deeper
commercial ties.
There are about 245 Australian companies with an Indonesian presence, but there is
no reason that number should not be 1000.
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12/1/2015 Trade deal recognises the neighbour we cannot ignore | afr.com
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Minister for Trade Andrew Robb addresses a conference in Yogyakarta, Indonesia this week. Reuters
Over the last two weeks, under the Indonesia Australia Business Week banner, I led a
delegation of 360 forwardlooking business people, our biggestever mission to
Indonesia. The delegates represented companies in key areas where Australia excels,
including infrastructure, resources and energy, health and aged care, education,
tourism, advanced manufacturing, agriculture, premium food and beverages.
The program comprised 110 separate events and 25 site visits across four cities
'MEETING OF THE MINDS'
Prime Minister Malcolm Turnbull's "meeting of the minds" with President Joko Widodo,
helped create the right atmospherics for me and my Indonesian counterpart, Thomas
Lembong, to confirm that stalled negotiations for a bilateral trade deal, a
Comprehensive Economic Partnership Agreement, would be reinvigorated next year.
My objective would be to conclude this if possible within 12 months.
While this will provide a platform for future growth, our business mission produced
some immediate results with some excellent deals consummated between Australian
and Indonesia companies during the week.
Careers Australia, for example, launched the Australia Indonesia Professional Training
Centre, a joint venture with local food and beverage firm Es Teler 77 to grow
Indonesia's skill base in the hospitality industry.
Newcrest International agreed to undertake mineral exploration in conjunction with
Antam, a large and diversified Indonesian mining and metals company. And health
supplements maker Blackmores announced its entry into the Indonesian market by
partnering with Kalbe Farma, one of the largest healthcare companies in southeast
Asia.
This will team Blackmore's exceptional production and quality control with Kalbe's scale
and established distribution capability.
Additionally, an agreement between the Australian Automotive Aftermarket Association
and the Indonesian OffRoad Association will jointly promote Australia's quality
aftermarket parts, accessories and services to a growing number of Indonesian auto
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enthusiasts.
A BEGINNING
This is just the beginning of the types of partnerships we expect to blossom.
When you deepen trade and commercial ties, new investment inevitably follows. While
in Jakarta I hosted an investment roundtable with a selection of high net worth
Indonesians with a cumulative wealth of about $60 billion. I took this opportunity to
showcase major opportunities in Australia, including northern Australia and found a
very receptive audience.
The beef industry supply chain is, of course, an area of great complementarity between
us, and Indonesian companies have made significant recent investments in Northern
Territory cattle stations. Australia is great at breeding premiumquality cattle and
Indonesia has a real strength in fattening them for market through their feed lots.
It is a similar story for wheat. Australia already exports about $1.3 billion worth of wheat
to Indonesia – compared to live animal exports of $560 million – with its quality and
white flour ideal for noodles and baked items which Indonesia produces for domestic
sale and export.
There are also rapidly emerging opportunities for a wide array of Australian services in
Indonesia, both in the direct provision and in the building of capacity. Services are
needed in response to growing middleclass demand and they will also be a critical
source of future jobs.
Indonesia Australia Business Week was about using the badge of government to open
doors into another important market. It follows similar successes in China and
India. Early next year, the inaugural AustraliaUnited States Business Week will
showcase the new possibilities that are opening up with one of our oldest trading
partners.
Trust is the key to any successful relationship and as our most recent business
delegation to Indonesia has demonstrated, the best way to build trust is to turn up.
Andrew Robb is Minister for Trade and Investment.
AFR Contributor
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