The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), which took effect on July 5, can raise the country’ gross domestic products of 0.23% or add AS$1.65 billion (Rp16.5 trillion) per year, the Foreign Minister Retno Marsudi said on Thursday (July 9).
“Under the IA-CEPA agreement, both countries will enjoy certain preferential market access. We expect a boost in the export of some Indonesian products to Australia, such as textiles, automotive products, electronics, fish products, and communication tools, as the trade pact is now in effect,” Marsudi said in a media briefing in Jakarta.
The minister explained IA-CEPA not only covers trade agreements on goods services and investment but also the vocational education, higher education, and the health sector. Indonesia’ advantages within the agreement framework are the imposition of a 0 percent tax on Australian imports.
As global trade was disrupted by the COVID-19 pandemic, Indonesia’ export fell 28.95% year-on-year (y/y) to US$10.53 billion in May. However, the country’ export to Australia still rose 15.69% y/y to $920 million in the January-May period, when export to major trade partners was mostly down.
