Indonesia FTA completed but text remains secret until after signing

September 3, 2018: Australian Prime Minister Scott Morrison and Indonesia’s President Joko Widodo have announced the completion of talks for an FTA but as usual we won’t see the text until after it is signed in two months’ time, and the text can’t be changed.

Australia’s Department of Foreign Affairs and Trade issued a rosy four-page summary of the agreement which as usual highlights the gains for Australian exporters. It claims that 99 per cent of Australia’s exports to Indonesia by value will be tariff-free and / or have higher quotas. But many Australian exports continue to be affected by quotas, meaning gains in those areas will be limited.

Australian services investors will be allowed to increase their ownership of companies in Indonesia to 67 per cent. This covers TAFE, Universities, Hospitals, Aged Care, Telecommunications, Transport, Wastewater, Construction, Mining and related services, and other Professional Services. Australian investors will be able to own 100 per cent of 3-5 Star hotels.

Indonesia gains tariff-free access for 99 per cent of its exports to Australia, with no quotas. It also gains access to most services in Australia, with some exceptions that Australia has also listed in other trade deals. Working Holiday Visas for seasonal Indonesian workers in Australia will increase from 1,000 per year to 5,000 per year.  As usual, there is no independent assessment of the costs and benefits of the deal. As ACTU President Michele O’Neil says in her oped in the Fairfax media, the full text is likely to reveal that the deal will deliver more benefits to corporations than to most Australians.