You’ve probably heard something about the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), especially if you follow the news surrounding Indonesia. There has certainly been quite a buzz within communities in the Australia-Indonesia space after the agreement entered into force in July this year following more than ten years of negotiations. Though it may sound like just another boring trade agreement, the IA-CEPA is different, and here is why it deserves your attention.
As one of Australia’s newest free trade agreements, the IA-CEPA was constructed with the goal of strengthening the economies of Indonesia and Australia by reducing or eliminating specific barriers to trade and investment between the two nations. In other words, the IA-CEPA promises to deliver more benefits and opportunities for Australian businesses in the Indonesian market in regards to exports, imports and investment. Of course, as a bilateral economic agreement, the IA-CEPA also offers opportunities for Indonesian enterprises to further expand their businesses into the Australian market.
Indonesia has a fast-growing economy, one that is estimated to be the fifth-largest in the world by 2030. In 2019, Indonesia became Australia’s 13th largest trading partner. This creates a platform for Australians to expand their businesses and gain colourful educational experiences in a country whose ambition is only to grow even more.
What’s interesting about the IA-CEPA is that its scope is not limited to the trade in agricultural goods, but also covers services and digital trade. Sectors that are covered within IA-CEPA include education, work-training, tourism, health services, and much more. If you operate a business in these fields, this comprehensive partnership agreement has your interests at heart.
Grow Your Business
Those in the business of importing and exporting goods stand to benefit greatly. One direct impact is reduced or eliminated tariffs for exported goods into each other’s markets. Not only that, by building on the outcomes of the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), Australian goods will obtain easier market access into Indonesia under the IA-CEPA. If you’re looking to do business in Indonesia, the Australian Trade and Investment Commission offers great resources to help you get started.
Expand Your Employability Skills
What’s more, businesses are not the only ones who stand to reap exciting benefits from the IA-CEPA. You may be keen to explore the Reciprocal Skills Exchange program, which opens up new doors for people with tertiary-level skill qualifications to gain up to 6 months of training experience in the other country. Currently, the pilot program only applies to certain sectors and sets a maximum number of 100 exchanges. However, this number will increase with time.
Expand Your Education
Furthermore, the education sector receives its well-deserved spotlight in the IA-CEPA. The agreement secures the future prospects of Australian universities that wish to establish a presence in Indonesia, a process spearheaded by Monash University. Monash University aims to open a postgraduate campus in Jakarta by the end of 2021, which will make it the first foreign university campus in Indonesia. The establishment of Monash Indonesia will offer prospective students the opportunity to partake in cross-campus collaboration, as well as help more Australians and Indonesians pursue their careers in the fields of education and research.
These are just some of the highlights from the IA-CEPA that have excited us here at Asia Options. The truth is, we have yet to unlock the vast skill, creativity and potential shared between Australians and Indonesians. With the establishment of the IA-CEPA, both countries have taken an encouraging step towards a stronger and deeper bilateral relationship.