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GFMM desk: According to a report by the US Department of Agriculture (USDA) Global Agricultural Information Network, both Australia and Indonesia have approved bilateral free trade agreements that will provide preferential access to more than 99% of imported Australian imported products.
The Indonesia-Australian Comprehensive Economic Partnership Agreement (IA-CEPA) creates a framework to unlock bilateral economic partnerships, strengthening economic cooperation between businesses, communities and individuals.
According to Australia’s department of foreign affairs and trade, Indonesia is a growing market for Australian goods and services exporters. In 2018-19, total two-way trade in goods and services with Indonesia was worth a $17.8 billion, making Indonesia Australia’s 13th largest trading partner.
Indonesia was the fifth largest export market for agricultural products in 2019 after China, Japan, the United States and South Korea. USDA reports that Australia's agricultural exports can usually range from a $ 2 billion to $ 2.5 billion, but Australia's wheat shipments have declined in Indonesia in the last two years due to severe drought and intense competition from other suppliers.
As part of the agreement, Indonesia will guarantee the supply of grain for food intake:
Guaranteed to enter the Indonesian market for 500,000 tons of feed grains (wheat, sorghum, barley) per year, increased by 5% per year.
Outstanding tariffs have not been eliminated under the ASEAN-Australia-New Zealand FTA over most of the remaining cereals and grains.
Elimination of 5% tariff on rolled outs, Elimination of 5% on unroasted malts.
The deal was supported by an Australian-based grain representative, GrainGrowers, in the hope that it would help crop farmers capitalize on this new market by 2020.
“We would like to sincerely thank the Australian government for the significant efforts directed toward this really positive outcome for grain farmers,” said Brett Hosking, chairman of GrainGrowers. “In a period of global economic uncertainty, it is encouraging to see the Australian government take positive steps in shoring up trade opportunities. We hope that growers across the country will be able to take advantage of the opportunities IA-CEPA brings.”
Another component of IA-CEPA is the development of a grains-specific economic cooperation initiative, the Australia-Indonesia Grains Partnership. The partnership will ensure Indonesian stockfeed and livestock industries have the right technical support when using Australian feed grains such as barley, maximizing productivity for the sector.
“We look forward to working with the Australian government to ensure the partnership is appropriately funded and effectively implemented as quickly as possible,” Hosking said. “This agreement is critical for our farming businesses. We are looking forward to working with our Indonesian colleagues and gratefully acknowledge the contributions of many organizations whose hard work has brought about the successful ratification of IA-CEPA.” Find more…
Source: Online/SZK
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