Australia welcomes FTA with Indonesia

September 04 , 2018

Australian vegetable industry association Ausveg has welcomed the finalization of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).

It said the free trade deal will create the framework for a new era of closer economic engagement between the two countries, which should improve two-way trade and provide opportunities for Australia’s fresh vegetable exporters.

In the 2017-18 financial year, Australian vegetable exports to Indonesia were valued at AUD$3.7 million, with the top commodity being potatoes, which accounted for nearly half of this total.

Given Indonesia’s developing population and its proximity to Australia, the market has strong potential for local growers to boost their fresh vegetable exports, Ausveg said.

It said key vegetable items to benefit from the FTA are carrots and vegetables. The import quota for carrots will double to 10,000 metric tons (MT) annually after 10 years, while the potato quota will grow by a quarter to 12,500MT after five years. Both will be subject to a decreasing tariff schedule during this time.

“The efforts of the Department of Foreign Affairs and Trade and former Trade Minister Steven Ciobo who worked together with their Indonesian counterparts to finalise negotiations are greatly appreciated by the Australian vegetable industry,” said Ausveg CEO James Whiteside.

“In particular, the agreement to increase import quotas and decrease tariffs for carrot and potato exports – two of the Australian vegetable industry’s key export crops – should lead to an immediate increase in the trade of these commodities to Indonesia, a potentially lucrative market for our growers.”

The vegetable industry is seeking to increase its export value to AUD$315 million per year by 2020, an increase of percent from 2016.

“We are currently in a fantastic position to take advantage of opportunities in lucrative export markets, and the industry is working hard to ensure growers have the necessary tools to be successful in the exporting process,” said Whiteside.

“Trade agreements with neighbouring countries such as the IA-CEPA helps provide our industry with confidence that it can continue to prosper through developing export markets, which helps secure the profitability and competitiveness of the Australian vegetable industry.”

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