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Indonesia, Australia free trade talks set to progress following heightened tensions

Xinhua, March 15, 2016 Adjust font size:

Indonesian and Australian free trade talks are set to progress this week in a bid to turn around "underdone" business and investment ties following a period of heightened bilateral tensions.

Former investment banker now Indonesian trade minister Thomas Lembong, arrived in Sydney on Tuesday for meetings with Australian business and political figures before travelling to Canberra on Wednesday for talks with Australian Trade Minister Steven Ciobo.

It is believed both-sides will be able to reach a stage where they can announce formal talks towards an Indonesia-Australia Free Trade Agreement (FTA).

"This week's discussions will, I hope, provide a solid platform to really build momentum in terms of the trade and investment relationship between Australia and Indonesia. The relationship has historically been underdone," Ciobo said in a statement.

Lombong's visit marks a shift in trade priorities for Australia given the Trans Pacific Partnership is currently stalled by the U.S. election season, trade improvements with the Middle East appear stalled and discussions on an Australia-India FTA have been caught up in Indian politics.

Momentum for a bilateral trade treaty was spurned by Australian Prime Minister Malcolm Turnbull's visit to Jakarta in November 2015 where the two country's leaders "had great personal chemistry", Lombong told News Corp, revitalizing the relationship following tensions in other areas.

Australia-Indonesia relations went through a sour period during the prolonged execution period of convicted Australian drug smugglers Andrew Chan and Myuran Sukamaran where former Prime Minister Tony Abbott alleged they should be released due to Australia's aid contribution to Indonesia.

Abbott's comments sparked the "coins for Abbott" movement on Jakarta's streets where Indonesians donated coins in an effort to pay back Australia's aid money.

However Australia says largest barrier to the FTA might be Indonesia's post-colonial protectionism. Lombong stressed last week this "shallow nationalism" is coming to an end and that Indonesia will now embrace an open, less constrained economic model. Endit