A New Trade Deal !

It was an auspicious start when new prime minister Scott Morrison travelled to Indonesia to ink the preliminary papers of a trade deal that will abolish most of the tariffs that apply to goods traded between the two countries. There is the expectation that the application of visas for holiday travel will be eased for Indonesians and this will result in a big fillip for our tourist industry.

A virtual free trade deal between Indonesia and Australia simply makes common sense. Indonesia is an archipelago containing two hundred and seventy million people - and it is right on our doorstep. We have a problem with our live exports of sheep and cattle to Middle East markets because they are six weeks sailing away and this is debilitating to the stock carried through the tropics.  The Indonesian market is little more than a days sailing away from our nearest port and could be the answer to our vast livestock industry.

The rise of China has been creating friction in the vast Pacific ocean area.  Much of world trade passes through the East China sea and China has laid claim to this waterway and that is not recognised by world authorities.   There are clear advantages where trade between our two countries avoids this area of confrontation and military cooperation has been steadily improving in recent years. This integration of our economies is likely to further strengthen those ties.

There is the expectation that by mid century the Indonesian economy will have expanded to become a world player.  That metaphor that " a rising tide lifts all ships "  applies.  We are likely to face a hungry world and the expectation that Australia's great land mass can be the food bowl of the Pacific is an expectation of prosperity that is very appealing.

This free trade deal has the prospect of creating jobs in both countries and until now it has been a neglected market.   The removal of tariffs brings a vastly expanded opportunity for expanded trade in agriculture, manufacturing and those important services of banking and financial commerce that support world trade.  Australia will need to quickly improve the services offering if it is to compete with the service centres opening in places like Singapore.

This free trade deal opens the door of opportunity.  It seems that Scott Morrison is able to continue the good relations forged by Malcolm Turnbull and Indonesian president  Joko Widodo is extending the hand of friendship.  It is important that the Australian business community move promptly to take advantage of the opportunities offering.

A new customer base comprising two hundred and seventy million people does not open on our doorstep every day and this is the opportunity of a lifetime !