With the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) now in force as of 5 July, Queensland exporters are being urged to look for new opportunities in the rapidly expanding Indonesian market.
The IA-CEPA is a free trade agreement designed to foster further economic cooperation between Australia and Indonesia and to expand and diversify bilateral economic partnerships.
Queensland Trade and Investment Commissioner for Indonesia Ben Giles said the new agreement should be a prompt for all Queensland exporters to turn their gaze to a massive but often neglected overseas market close to home.
‘Indonesia is one of Queensland’s nearest neighbours, with Jakarta only around 7 hours flying time from Brisbane and just a few hours’ time difference from Queensland,’ he said.
‘Indonesia is also home to around 267 million people – that’s more than 10 times Australia’s population – and a rapidly expanding middle class that is actively seeking unique, quality products and services.
‘Indonesia has always had extraordinary potential for Queensland exporters, but that will be even greater now that IA-CEPA has come into force and many Australian goods can enter the country either duty-free or under improved preferential arrangements.
‘While COVID-19 is obviously posing challenges here right now – as it is around the world – I do believe Indonesia should be on Queensland exporters’ list of markets to explore once normal trade can resume.’
Mr Giles said he expected the most noticeable trade benefits of IA-CEPA to be in agriculture, but encouraged Queensland exporters in all sectors to research Indonesian opportunities and to seek support from TIQ’s Jakarta-based team.
‘Historically, Queensland agricultural producers have been big exporters of live cattle, beef and a range of horticulture products to Indonesia,’ he said.
‘Under IA-CEPA, their Indonesian importers and partners will benefit from reduced tariffs and/or increased quotas.
‘The new agreement will also provide greater certainty for services suppliers such as education and healthcare providers who may wish to set up a presence in Indonesia with a local partner.
‘I’d encourage exporters to really commit to exploring the Indonesian market properly, and to take advantage of the insights and support that TIQ’s Queensland and Jakarta advisers can provide.’
Queensland exported $1.3 billion worth of goods to Indonesia in the 12 months to May 2020, making Indonesia Queensland’s tenth-largest export market in that period. Most exports were in the resources (including coal and minerals) and food sectors.
Queensland exports account for about one-fifth of Australia’s total goods exports to Indonesia, including about one-third of Australia’s beef exports to the Indonesian market.
TIQ relocated and expanded its Jakarta office in 2018, supported by funding committed under the Queensland Trade and Investment Strategy 2017–2022.
If you’d like advice on exporting into Indonesia, or other overseas markets, contact TIQ today.
Please note: Australia’s arrangements with Indonesia under the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) remain unchanged. While IA-CEPA builds on outcomes in AANZFTA, the 2 agreements will co-exist and businesses will be able to continue to use AANZFTA.