Australian-Indon trade deal faces hurdles

The Australian Indonesian trade deal faces some challenges with the Indonesian opposition signalling they might want further changes to it if elected.

Australia ended years of tough negotiations with its recent signing of an historic trade deal with Jakarta last month, but its ratification and final implementation could hinge on Indonesian elections next Wednesday, in a country politically capable of throwing up unexpected results.

At stake is the opening-up of the Indonesian economy to goods and services from Australia ranging from education and steel to health care and beef. It suffered an embarrassing setback when Prime Minister Scott Morrison suggested he might move the Israeli embassy from Tel Aviv to Jerusalem.

Smooth ratification of the Free Trade Agreement (FTA) depends on the re-election of President Joko Widodo. His chief nemesis Probowo Subianto is backed by hardline Islamic clerics, a religious card he is adept at playing along with his country's support for the Palestinian territories.

Nasya Bahfen, a researcher with La Trobe University in Melbourne, said the deal faced an unlikely combination of almost simultaneous elections being held in both Australia, on May 18, and here on April 17.

"We're in unchartered waters as we've not faced a situation where an FTA has been inked but not ratified by Jakarta, and then Indonesia or Australia sees a change in government," he said in regards to the prospect of Labor leader Bill Shorten defeating Morrison.

"While I can't see a potential Shorten Labor government changing the terms of the deal, Indonesia's main opposition vice presidential candidate Sandiaga Uno has already signaled changes to the FTA should he and Prabowo win," Bhafen said.

Subianto had trailed Jokowi by up to 20 per cent in the opinion polls but that number is narrowing as election day draws nearer.

A survey by the Indonesian Newspaper Kompas, found the electability of Subianto and Uno increased by 4.7 per cent within the last six months to 37.4 per cent while Jokowi and his running mate Ma'ruf Amin, suffered a 3.4 per cent fall to 49.2 per cent.

"Subianto's supporters appear to sense this reality, and have recently changed their tactics from highlighting issues related to religion and ethnicity to questioning the impartiality of the poll's organisers, alleging that voter fraud may undermine the vote," Elliott said.

The prospect of shifting the Israeli embassy to Jerusalem, currently on hold, prompted a scathing attack from Uno who demanded its cancellation when it was first raised in October last year.

On the hustings, Uno- who has promised to double GDP growth from a current five per cent - repeated that claim adding "we need to ensure that the trade benefits both sides" saying he would abolish quotas for Australian beef, a move that would please the local cattle industry.

However, as potentially the next economic planning minister in Subianto's administration he said any renegotiations would be swift. It could also form a major plank in an overhaul of multilateral trade relations with the former general attempting to pry open new "non-traditional" markets.


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3 min read
Published 13 April 2019 3:44pm
Source: AAP


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