After about two years of bilateral tensions, Australia and Indonesia have agreed to restart talks to create a bilateral trade agreement.
Trade minister Andrew Robb said the breakthrough came with the meeting between Prime Minister Malcolm Turnbull and Indonesian president Joko Widodo.
Mr Turnbull had made a flying visit to Jakarta to rebuild relations. Mr Robb said the PM had called him last Friday to tell him there had been a “meeting of minds”.
Mr Robb plans to have an Indonesia agreement, based on similar lines to the one Australia has with China, South Korea and Japan, in one year.
He signalled that Australia would take a similar approach to the Indonesia trade talks to the model it used for China, putting the difficult issues aside and focusing on common goals.
Mr Robb announced the trade talks following a meeting with Indonesian Trade Minister Tom Lembong in Manila at the Asia-Pacific Economic Co-operation group summit on Monday. A former investment banker who took on the job three months ago, Mr Lembong is a champion of cutting trade barriers.
Indonesia has a population of 250 million people and a growing middle class but it’s not even in Australia’s top 10 trading partners. Trade with Indonesia is valued at $12 billion.
A new report prepared by ANZ and PwC for the Australia-Indonesia Centre urges Australia and Indonesia work together in areas like fashion, food processing, logistics, and animal products and recommends they seize the trillion dollar trade opportunities in south-east Asia by combining forces to sell into third markets as partners rather than competitors.