Minister wants diversified trade with Australia

The Jakarta Post, Nusa Dua, Bali

Trade Minister Mari Elka Pangestu called on Indonesian and Australian businesses to diversify the types of goods and services traded between the two countries as their governments take soundings on the establishment of a free trade agreement.

Acknowledging that exports to and imports from Australia are booming this year, she told the Indonesia Australia Business Council (IABC) that the types of goods and services traded between the two nations have remained relatively unchanged.

"We are making progress, but we are still trading in the traditional way," she stated.

"I want to put it on the table. How do we change this? How do we diversify our trade?" she commented during a keynote speech opening the two-day Indonesia Australia Business Conference.

The minister said that Indonesia's exports to Australia grew by 40 percent in value during the first semester of this year, against a 20-30 percent increase in imports. Indonesia exports petroleum, wood and paper products and television sets to Australia, and imports petroleum products, aluminum, wheat, cotton and milk from Australia.

Mari also noted a significant decline in the services trade between the two countries in recent years, most notably due to a decline in the number of Indonesians studying in Australia and the number of Australian tourists visiting Indonesia.

While the two governments are still at the preliminary stages of negotiating a free trade agreement, Mari underlined a number of areas where they could expand trade into new areas, aside from the traditional sectors.

She suggested the sending of skilled Indonesian workers to meet the shortage of workers in Australia as one area that the business community should look into, with Australian aid money to Indonesia being used to help with capacity-building by providing training and certification for Indonesian workers in the health and construction sectors.

Indonesia has only entered into one free trade agreement so far, with Japan, while Australia has already signed such agreements with all of its top six trading partners, with the exception of Indonesia, she said.

Mari also said there had been talks about exporting Indonesian fruit to Australia, as part of which Australian importers would provide assistance with capacity-building to Indonesian growers.

She listed mangoes and mangosteens, but ruled out durians and bananas, as the latter could hurt banana growers in Australia.

A participant from the floor cautioned Mari against writing off durian given the increasing Asian population, particularly in Sydney, who were partial to the malodorous fruit.

"We'll add durian to the list, then," Mari responded.