The ASEAN Republic of Korea Free Trade Agreement (AKFTA) was signed in 2005 and eliminated more than 90% of tariffs between ASEAN and the Republic of Korea. In addition, the agreement also liberalised the investment process and strengthened cooperation in the field of commercial services. Indonesia, as a member of ASEAN, has also concluded a free trade agreement with Australia and New Zealand. The trade bloc entered into force on 1 January 2010 and contains main programmes aimed at gradually reducing import duties to zero within certain time frames, removing barriers to trade in services and simplifying customs procedures. Australia and New Zealand are Indonesia`s largest trading partners, with a total trade value of $8.4 billion and $1 billion, respectively, in 2015. After growing dissatisfaction with the Investor-State Dispute Settlement Mechanism (ISDS), in which foreign investors can seek compensation before an arbitral tribunal if new laws or regulations negatively impact their investment potential, Indonesia decided in 2014 to phase out 67 of its bilateral investment treaties. So far, the government has terminated 20 contracts and developed a new model bit that would supposedly reflect a more balanced approach between the country`s regulatory law and the protection of foreign investors. The Asean-Australia-New Zealand Free Trade Area (AANZFTA) entered into force in January 2010. AANZFTA eliminated 90% of tariffs and gradually liberalized barriers to trade in services as a result of improved market access.
The indonesia-Pakistan trade agreement was signed in 2012 and entered into force in 2013. Under the Preferential Trade Agreement, Indonesia and Pakistan grant each other tariff preferences for more than 200 goods. The annual trade value between Indonesia and Pakistan was $2.1 billion in 2015. This agreement was signed on 20 August 2007 and entered into force on 1 July 2008. At the current stage of implementation, more than 92% of products have been subject to tariff reductions. As one of Indonesia`s major trading partners, Japan and Indonesia recorded a total trade value of $31.2 billion in 2015. The Agreement was signed by ASEAN Member States and India on 13 August 2009 and entered into force on 1 January 2010. India and Indonesia recorded a total trade value of $14.4 billion in 2015. Signed on 28 January 1992, more than 99% of the product categories in this trading bloc are already duty-free. For Indonesia`s intra-ASEAN trade activities in 2015, Singapore and Malaysia topped the list in terms of total value with $30.6 billion and $16.1 billion, respectively. As a broad-based free trade agreement, CEPA EFTA-Indonesia covers trade in goods, trade in services, investment, intellectual property rights, government procurement, competition, trade and sustainable development, and cooperation.
In the area of trade in goods, the EFTA States shall abolish all customs duties on imports of industrial products, including fish and other marine products, originating in Indonesia. Indonesia will phase out or reduce tariffs on industrial products, including fish and other marine products, originating in an EFTA State. Indonesia is also negotiating the following trade agreements: Indonesia is the second largest recipient of Australian development aid in 2016/17 with nearly US$300 million. Australia has also maintained closer defence ties with Indonesia through the Lombok Treaty since 2005 and has worked more closely with Indonesia on counter-terrorism and human smuggling since the 2002 Bali bombings that killed 88 Australians. Australia is also linked to Indonesia through a number of regional forums and agreements. Both countries are members of the G20, the ASEAN Regional Forum and the Australia-New Zealand-ASEAN Free Trade Agreement signed in 2009. Indonesia has been a member of the WTO since 1995 and benefits from trade preferences granted under the EU`s Generalised System of Preferences (GSP), which imposes lower tariffs on around 30% of total imports from Indonesia. With all these years of work by Australia and Indonesia to create a lush environment for bilateral trade and investment, and given the proximity of our land masses, it may not be long before Indonesia climbs higher in the ranking of places where Australians do business. Indonesia is a member of the free trade agreement between ten ASEAN member states and China. The original framework was signed on 4 November 2002 […].