During the first foreign visit of new Australian Prime Minister Scott Morrison to Jakarta, he and Jokowi announced an agreement on the IA-CEPA on 31 August 2018.  However, the signing was delayed due to a bilateral dispute over Australia`s recognition of West Jerusalem as israel`s capital, which sparked Indonesian diplomatic protests.   The agreement was finally signed in March 2019 by Lukita and Australian Trade Minister Simon Birmingham, subject to ratification by the Australian Parliament and the Council of Indonesian People`s Representatives.   Australia is an open economy that relies heavily on trade. It has escaped protectionism for decades. It is already a member of multilateral trade agreements such as the ASEAN AANZFTA and the 11-member CPTPP. Australia now accounts for almost 80% of its exports, which are covered by trade agreements. Two-way services trade was estimated at $6.2 billion in 2018/2019. Education-related travel dominates Australian services exports to Indonesia.
Bilateral trade negotiations between the two countries began in November 2010, with the IA-CEPA itself announced in a joint statement chaired by Susilo Bambang Yudhoyono and Prime Minister Von Julia Gillard.   After several conferences and meetings during 2011, another joint communiqué was issued following a meeting in Darwin on 3 July 2012, calling for the opening of negotiations by the end of the year.  Relations between the two countries (following the 2013 Australian spying scandal and the Indonesian execution of Australian citizens in 2015) continued, and in 2015 Indonesia imposed tariffs on imports of Australian cattle. Finally, Indonesian Trade Minister Thomas Lembong and his Australian counterpart Steven Ciobo announced the resumption of negotiations in March 2016.  Four rounds of negotiations took place prior to the resumption of talks.  Information on export and import opportunities can be found under the IA-CEPA, AANZFTA and other free trade agreements on the FTA portal. The fact that the two countries entered into the agreement with such a different trade policy is a given in the current context of trade war and protectionism. The COVID 19 pandemic is making the situation worse. The AI-CEPA is the first in a series of subsequent agreements that Indonesia concludes or negotiates with advanced partners. An agreement between Indonesia and South Korea is about to be concluded and a free trade agreement is being negotiated with the EU. Indonesia is also part of RCEP.
It has expressed interest in joining the CPTPP, which would be an important step, although some analysts doubt that Indonesia will be able to comply with its provisions. The Comprehensive Economic Partnership Agreement between Indonesia and Australia (IA-CEPA) is a bilateral agreement signed between Australia and Indonesia in March 2019 and ratified by Australia in November 2019 and Indonesia in February 2020. The agreement contains a free trade agreement that removes tariffs on almost all goods traded between the two countries, as well as easing investment rules in Indonesia for Australian businesses and increasing the quota for Indonesians seeking vocational training in Australia. Australia`s two-way trade with Indonesia totaled $11.7 billion in 2018/2019, making it Australia`s 14th largest trading partner. Resources and agricultural products are one of Australia`s largest exports of goods to Indonesia, which is one of Australia`s largest markets for coal, crude oil, wheat and live animals.