In early March the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) was finalised and signed. It is yet to be ratified, however the trade ministers have indicated that this will occur before the end of 2019.
Indonesia is already a large market for Australian exports, particularly agricultural products, which comprise half of all exports between Australia and Indonesia. However, the IA-CEPA will further boost agricultural business, by facilitating access to new markets in the growing Indonesian economy.
The IA-CEPA is beneficial to agribusinesses because it grants preferential trade arrangements, which include decreased or potentially no tariffs. The IA-CEPA is intended to serve many purposes. It is hoped that with free bilateral trading there will be growth in businesses and employment and greater investment opportunities. Furthermore, the IA-CEPA creates scope for new products, which are a culmination of Australian and Indonesian resources and labour, to be made and sold.
Businesses can take a number of steps to prepare to maximise opportunities under the IA-CEPA in 2020. These include investigating potential partners, clients and distribution channels. For trade to be successful, it is imperative that businesses make themselves aware of transport and packaging regulations and product quality standards in place in Indonesia. Businesses should also be aware of and put in place the necessary legal protections where engaging in business across borders, for example non-disclosure agreements. If you or your business requires assistance in implementing such legal protections, please contact M+E today.