Australia and Indonesia have resolved to strengthen economic ties, vowing to sign a free trade agreement and avoid protectionism policies.
Trade minister Simon Crean and Indonesian counterpart Mari Pangestu agreed in July 2007 to begin a joint feasibility study to examine whether to pursue free trade negotiations.
On Thursday, both ministers said a final draft of an Indonesia-Australia Free Trade Agreement had been put together, but was yet to be finalised.
“I’m delighted because the feasibility study has demonstrated that there are worthwhile benefits for both economies in pursuing a free trade agreement, (and) both of us see that as the sensible way forward,” Crean told a joint media conference with Dr Pangestu in Sydney.
He said the agreement would cover trade, investment, and capacity building issues.
Crean said it was important nations resisted the path of protectionism during the current economic crisis.
“Protectionism, no matter how much it is dressed up or sold, invites retaliatory reaction,” he said.
“It sends you on the downward spiral.
“You can carry as many resolutions as you like that say we shouldn’t allow protectionism. Unless you have disciplines that prevent it, they will emerge.”
Dr Pangestu rejected media reports Indonesia had started a “buy local” campaign.
“There is no decree to buy local and there is no government move to impose such policies,” she said.
Crean said a free trade agreement between Australia and Indonesia would not be signed until both countries were satisfied with what they were signing.
“Trade agreements are not something that can be completed overnight,” he said.