Lawmakers have officially ratified the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), marking a new chapter of cooperation between the neighbors.
At least 374 House of Representative members agreed to the bilateral pact during a plenary session on Thursday.
“This agreement should really boost Indonesia’s export performance so that it could positively affect the country’s trade balance,” House of Representatives Commission VI chairman Martin Manurung said.
The IA-CEPA could bring significant tariff cuts on commodity exports between the two countries and offer various investment privileges, as Indonesia strives to boost exports and attract foreign investment to help spur its sluggish economic growth.
Indonesia recorded a trade deficit of US$3.2 billion last year, marking a significant improvement over the $8.7 billion recorded in 2018.
Meanwhile, the Investment Coordinating Board (BKPM) has set an investment realization target of Rp 886 trillion ($64.9 billion), 9.4 percent higher than the recorded investment realization of Rp 809.6 trillion last year.
President Joko “Jokowi” Widodo will meet Australian Prime Minister Scott Morrison in Australia this weekend to discuss the agreement, among other matters, Foreign Ministry acting spokesperson Teuku Faizasyah told reporters on Thursday.
At the meeting, the two countries are set to launch a plan of action for the 2020 to 2024 period as the reference for the implementation of the IA-CEPA, he added.
“The ratification is one thing that we have been waiting for. Australia has already completed it, while Indonesia is in the final stage,” he said. “Hopefully, once it is all completed, we can begin working on what we call ‘the low-hanging fruit’ so that we can implement the agreement.”