Indonesia, Australia Urged to Review IA-CEPA to Strengthen Economic Resilience
Jakarta, The Gulf Observer: Indonesian Ambassador to Australia, Siswo Pramono, has emphasized the urgency for Indonesia and Australia to enhance economic resilience as geopolitical tensions increasingly impact regional stability. His remarks were delivered via video message at the commemoration of the fifth anniversary of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) held on Thursday, July 3.
“It is now timely for us, for Indonesia and Australia, to review this IA-CEPA,” Pramono stated, adding that the agreement must increasingly serve Indonesia’s interests as a developing country.
The ambassador highlighted the need for Indonesia to improve its trade positioning with Australia in order to strengthen its broader trade surplus with other international partners. He pointed out that boosting value-added and competitive exports—such as garments, automotive components, electronics, biofuels, and batteries—is essential.
While affirming the continued importance of agricultural commodities, Pramono advocated for the IA-CEPA review to also focus on emerging sectors including critical minerals, non-semi industries, and manufacturing. He encouraged closer cooperation in technology transfer, capacity building, and industrial knowledge.
“Australia can assist Indonesia with upscaling, transfer of technology, know-how, and knowledge to help build Indonesia’s manufacturing capabilities,” he noted.
Pramono further expressed hope that Australia would increase investments in science, technology, engineering, and mathematics (STEM) education, along with professional training in governance, environmental, and social (ESG) standards.
“Hopefully, in the future, we will also cover skilled labor such as nurses and caregivers,” he added, highlighting the importance of human capital development.
The ambassador also pointed to a slight decline in bilateral investment over the past two years and called for intensified joint efforts to reverse the trend. He stressed that mutual trust is key to navigating global uncertainties and fostering deeper economic ties.
In response, Australian Ambassador to Indonesia Rod Brazier welcomed the initiative to review the IA-CEPA, emphasizing the need to adapt the agreement to new areas of cooperation. Brazier underscored the value of high-quality free trade agreements like IA-CEPA in fostering economic resilience in uncertain global conditions.
“Political tensions and uncertainty in international trade can impact the global economy. Agreements such as the IA-CEPA provide certainty for businesses and promote sustainable regional prosperity,” Brazier said.
Since its entry into force on July 5, 2020, the IA-CEPA has significantly boosted bilateral trade. Trade in goods and services between Indonesia and Australia doubled from 17.7 billion Australian dollars (approximately USD 11.6 billion) in 2019 to 35.4 billion Australian dollars (around USD 23.2 billion) in 2024.
Indonesia currently maintains a trade surplus with Australia, recording 3.13 billion Australian dollars (approximately USD 2 billion) in 2024, reflecting the growing strength of bilateral economic cooperation.
