KONTAN.CO.ID - JAKARTA. Indonesia and Australia signed a long-awaited trade deal on Monday, marking a new chapter of cooperation between the neighbors.

Indonesian Trade Minister Enggartiasto Lukita and his counterpart Simon Birmingham inked the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) in Jakarta on Monday after months of diplomatic tensions over Australia’s plan to move its embassy to Jerusalem.

In a joint press briefing after the signing, Birmingham said the agreement would take Australian and Indonesian relations to a new level.

“One in which economic relations will be much deeper, stronger and richer for both our nations, and in doing so will ensure our people-to-people ties, cultural diplomacy and understanding of one another will be reached, thanks to that enhanced business cooperation and trade activity,” he said.

The IA-CEPA will include improved access for Australian cattle and sheep farmers to Indonesia’s market of 260 million people. Meanwhile, greater access to the Australian market is expected to spur Indonesia’s automotive and textile industries and boost exports of timber, electronics and pharmaceuticals.

Bilateral trade between the two countries was worth US$8.6 billion last year.

Talks on the IA-CEPA began in 2010, however were stalled owing to diplomatic tensions until they were revived in March 2016.

The IA-CEPA was due to be signed last November but was once again postponed after Australian Prime Minister Scott Morrison proposed the relocation of the country’s embassy in Israel to Jerusalem.

The relocation plan had sparked strong criticism from Jakarta, with Foreign Minister Retno Marsudi reportedly telling her Australian counterpart Marise Payne that it was a “slap in Indonesia’s face".

After the signing on Monday, Jakarta is now aiming for the trade deal to come into force next year, pending ratification by the Indonesian House of Representatives and Australian Parliament, Enggartiasto said.

"We have to follow procedures and go to the legislatures, and hopefully by the end of this year [the agreement will] be ratified. It means that it [...] will enter into force [by] the end of this year or early next year," he said.

Editor: Wahyu T.Rahmawati