Australian universities to set up campuses in Indonesia under new free trade deal
Treaty is expected to be ratified by Indonesian parliament next year, but nationalist opposition could present ‘serious obstacles’
Australian universities are expected to get the green light to start setting up campuses in Indonesia under a new free trade deal.
Scott Morrison will make his first overseas trip as prime minister to Jakarta at the end of the week to announce, with Indonesian president Joko Widodo, that negotiations, first launched in 2010 and reactivated in 2016, have been finalised.
The trade deal is expected to be officially signed at trade minister level in September or October.
Australia is likely to ratify the deal by the end of the year but Indonesia’s parliament is expected to approve it by mid next year.
A senior Indonesian government official said in the next three to five years he expects a dramatic uptick in the trade of goods and services while it could take longer for an investment bounce.
“I think it’s going to be a game changer,” he told the Guardian Australia.
There is momentum building in Indonesia towards opening up its university sector to foreign institutions and
Australian education providers are likely to get a head start under the deal.
“By inviting international universities to
Indonesia they become much more accessible to a much larger number of Indonesians. We don’t want an international education to only be available to the rich,” he said.
He said other big winners included Australian luxury yacht builders as the archipelago pushes to expand its maritime tourism sector.
Under the deal import duties on Australian yachts and boats will be eliminated.
The news should keep shipyards happy in former trade minister Steve Ciobo’s Gold Coast seat.
It will also be easier for Australian companies to provide training on boat maintenance and crewing.
Australia’s cattle industry will also be pleased import quotas will be locked in for the first time.
“That will give stability and certainty to the annual flow of cattle imports, which will make Indonesian consumers very happy,” he said.
The cattle issue was one of the last sticking points to be settled, during the final round of negotiations in Melbourne earlier this month.
There has been much angst in Indonesia over cattle imports since the
Gillard government in 2011 temporarily banned the trade in response to footage of cruelty being aired on the ABC.
In 2015
Indonesia temporarily cut its import quota for Australian beef by 80%.
The deal will also increase the quota of working visas to Australia for Indonesians despite the fact the existing allocation is under used.
The government official doesn’t expect any implementation problems from Indonesia’s end.
However, Lowy Institute south east Asia expert Aaron Connelly, believes there could be some push back from nationalist forces in some quarters of the country.
He said it’s possible vested interests in Indonesia which control some of the relevant bureaucracies could thwart reform attempts.
“Indonesians have this tremendous sense of economic vulnerability and have always wanted to achieve self sufficiency in pretty much everything but especially food,” Connelly said.
“It would not be surprising that even if there were an agreement there would be serious obstacles to the implementation.”
On the sidelines of meetings it’s likely Morrison will attend an Asian Games sport event in Jakarta with the president.
Morrison must build rapport with his Indonesian counterpart and hope that any irritation has subsided over boat turn back policies from his time as immigration minister.
Indonesia was ropeable when it was
emerged Australian border protection vessels “unintentionally” breached Indonesian maritime boundaries during asylum seeker boat turnback operations in late 2013 early 2014.
Relations deteriorated further after Guardian Australia revealed that Australian intelligence agencies had
attempted to listen in on the personal phone calls of the then Indonesian president, Susilo Bambang Yudhoyono, his wife, senior ministers and confidants.
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Scott Morrison flying to Indonesia to meet President Joko Widodo
When the new Australian Prime Minister touches down in Indonesia this week, he’ll be looking to follow in his predecessor’s footsteps.
The friendship between President Joko Widodo and Malcolm Turnbull was described as a “bromance”.
It was an unusual way of looking at a relationship based on complex economic, security and geographic ties, but the pictures backed up the story.
There were happy snaps of Mr Widodo and his wife when they joined the Turnbulls for dinner at their Point Piper mansion, in Sydney.
Images of the two men taking selfies and strolls together, during President Widodo’s first official visit to Australia in 2017.
And perhaps the most enduring image of the two came while they took an impromptu visit to a crowded marketplace in Jakarta in 2015.
The Indonesian President introduced the Australian Prime Minister to the locals – and the scenes that followed were sweaty, frenetic and symbolic.
Malcolm Turnbull had only become prime minister weeks earlier, and this visit was regarded as a sign of his desire to leave the past behind – in the wake of the Bali Nine executions – and move forward with the Indonesia-Australia relationship.
International relations experts say it’s a smart move by Mr Morrison that he’s also decided to place Indonesia at the top of his international agenda.
“I think it’s important that the Prime Minister has decided to make this his first international trip…and it’ll certainly mean a lot to the Indonesian side,” Matthew Busch, non-resident fellow for the Lowy Institute’s East Asia Program, told 9NEWS.
“Indonesia and Australia will always be neighbours, they’ll never be able to get away from each other…they will always find things crop up and make things difficult from time to time, so it’s important to have the relationships, the diplomacy and the commercial links in place.”
Michael Shoebridge, Director of Defence and Strategy at the Australian Strategic Policy Institute, said Australia relies on Indonesia for its sense of security.
“One of the reasons Australians feel so secure is because of our location in the world, and a big part of that is the fact that to our north is one of the most populous nations, a peaceful, strong partner to Australia that is really part of our protection in the world,” he said.
Indonesia also has the potential to provide economic benefits to Australia.
“It sees itself as a leader in ASEAN (the Association of Southeast Asian Nations) with the most economic potential to be a real global economic power,” Mr Shoebridge says.
“Australia needs to do the hard work in this relationship to lift our economic partnership.”
Indonesia and Australia have been working on a free trade agreement for around six years now.
On Friday, when Prime Minister Morrison and President Widodo meet at the Indonesian Presidential Palace, it’s expected they’ll sign an agreement to keep working on one.
9NEWS understands it’ll be a political gesture, more than symbolic, and there will still be a number of hurdles to clear.
For Mr Morrison though, this visit is not about making deals – it’s about developing personal ties.
And how he performs that task could impact on Australia’s future relations with a friend, who we don’t always see eye to eye with.
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