Exciting new trade era with Indonesia begins today

The Hon David Littleproud MP
Minister for Agriculture, Drought and Emergency Management
  • The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) comes in force today, 5 July.
  • Almost 100 per cent of Australian goods exported to Indonesia will enter duty free or under significantly improved and preferential arrangements.
  • This agreement will grow the $2.5 billion export market even further.
  • By 2050 Indonesia is projected to be the fourth largest economy in the world.
  • A new trade era with one of the world’s fastest growing economies begins today, with the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) taking effect.

    Agriculture Minister David Littleproud said almost 100 per cent of Australian goods exported to Indonesia will enter duty free or under significantly improved and preferential arrangements from today.

    “By 2050 Indonesia is projected to be the world’s fourth largest economy, with per person consumption predicted to be greater than China for key commodities such as cereals and beef,” Minister Littleproud said.

    “With many restrictive tariff requirements for our exporters being eliminated under this agreement, Indonesia represents a game-changing opportunity for our farmers.

    “Securing this breakthrough with our sixth largest agricultural export market will help turbo charge trade opportunities in both countries and propel our post pandemic recovery.

    “More dollars will flow into the hip pockets of our beef, cattle, grains and horticultural producers, and into their rural and regional economies on the back of this agreement.

    “The benefits will be across the board and are a reminder of how our farmers and the agriculture sector will continue to be the bedrock of our recovery from the COVID-19 crisis.”

    IA-CEPA highlights include:

    • A quota of 575,000 live Australian male cattle per year will enter Indonesia duty free. The quota will increase to 700,000 per year by 2026. Previously, live male cattle had a five per cent tariff.
    • There will be a 2.5pc tariff cut for frozen beef, which previously had a five per cent tariff. After five years the 2.5pc tariff will be eliminated.
    • Australian exporters of feed grains such as wheat, barley and sorghum will enjoy duty free access for up to 500,000 tonnes per year into Indonesia. The quota will increase by five per cent per year.
    • Horticulture exporters will also benefit, with reduced tariffs and improved access across a range of commodities including citrus, carrots and potatoes.

    “Our dairy farmers will benefit from the elimination of a five per cent tariff on concentrated and sweetened milk and cream,” Minister Littleproud said.

    “There will also be the elimination of a five per cent tariff for grated and powdered cheese of all kinds.

    “The nation’s farmers have been calmly going about feeding Australia during COVID-19 and exporting to the world.

    “The Australian Government stands by our farmers and continues to work to find new and expand existing markets to give them a competitive edge.”

    Fast facts:

    • IA-CEPA means improved access to the Indonesian market for key agricultural products and increased transparency and reliability for obtaining Indonesian import permits.
    • IA-CEPA will build on existing multilateral and regional agreements including the 2010 ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), which saw Indonesia liberalise several livestock and red meat tariff lines.
    • To support IA-CEPA’s implementation, the Australian Government will roll out an Economic Cooperation Program which will include an Agrifood Partnerships component as a key outcome area.
    • With the entry into force of the agreement, producers will now be able to apply to the Department of Agriculture, Water and the Environment for quota access for a number of commodities including citrus, vegetables, feed grains and live cattle. Anyone interested in accessing these quotas should visit https://www.agriculture.gov.au/export/from-australia/quota.

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