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About IA-CEPA

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About IA-CEPA

The Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) supports Indonesia and Australia’s shared interest for a secure and prosperous region. Coming into force on 5 July 2020, IA-CEPA elevates the bilateral relationship, and creates new markets, relationships and opportunities for businesses, primary producers and skills exchange.

IA-CEPA also establishes an Economic Cooperation Porgram (IA-CEPA ECP Katalis). Katalis supports the Government of Indonesia and the Australian Government in implementing the IA-CEPA and helps businesses from both countries take advantage of the many opportunities for complementary development and growth.

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IA-CEPA creates a framework to unlock the vast potential of bilateral economic opportunities between Southeast Asia’s two largest economies.

Key benefits of IA-CEPA

Indonesia
Australia
Mutual
Indonesia
  • Elimination of all Australian tariffs on Indonesian goods exports to support the development of Indonesian manufacturing and processing sectors such as automotive (especially electric and hybrid cars), timber (including furniture), textiles, machinery, agriculture, fisheries, forestry and electronics. This also means any new product Indonesia develops in the future will face no tariff barriers when entering Australia.
  • Australia has provided the most liberal ‘Rules of origin’ requirements for Indonesian electric motor vehicles of any Australian trade agreement – thus offering Indonesia a significant advantage in accessing the Australian market in an industry targeted for its future growth potential. IA-CEPA also facilitates Indonesia’s electric vehicle industry ambitions through access to Australian lithium, nickel, and rare earth element mining projects.
  • Exchange programs and initiatives to strengthen Indonesia’s labour force, include:
    • an increase in the number of Australian work and holiday visas for Indonesians from 1000 to 5000. This will provide work experience and cultural exchange for young Indonesians (as well as assist regional Australia to meet seasonal labour requirements).
    • an agreement to achieve Mutual Recognition on engineering to increase Indonesian workers’ quality and ability to compete in the global market.
    • a commitment to allow up to 200 Indonesians per year to engage in six-month work training opportunities in Australia – helping to upskill Indonesia’s workforce in key sectors.
  • Australian investment in technical and vocational training services in Indonesia, making it easier for Indonesians to gain recognised international qualifications without having to leave home.
  • Economic cooperation on complementary food products such as grain and red meat partnerships, and a food innovation centre.
Australia
  • Over 99% of Australian goods exports by value to Indonesia will enter duty free or under significantly improved preferential arrangements.  (This also benefits Indonesia by reducing the cost of imported commodities to encourage processing in Indonesia).
  • Progressive tariff-rate quota increases for major Australian exports to Indonesia, including agricultural and natural resources commodities. For example, Australian livestock producers have a guarantee of zero tariffs for an annual quota of 575,000 for male live cattle. This will rise to 700,000 in the sixth year of the agreement.
  • In accordance with the WTO Agreement, Indonesia will issue import permits automatically and without seasonality for specific products committed under IA-CEPA.
  • Market access outcomes on services and investment will provide increased certainty for Australian businesses and services suppliers in the Indonesian market, including guaranteed levels of Australian ownership.
Mutual
  • IA-CEPA provides a platform to improve economic relations through a wide range of consultation mechanisms to fine-tune trade and investment procedures over time. These make IA-CEPA a “living agreement”.
  • IA-CEPA provides additional security and certainty for investors through a set of modern, high-quality rules for investment, services and digital trade. An Investor State Dispute Settlement (ISDS) mechanism will also provide investors with protection and give them more confidence to move capital between both countries. Among other provisions, the ISDS states that the host state treats investors and covered investments no less favourably than its own investors and investments, and as favourably as investors and investments from other states.
  • Australia and Indonesia have agreed to a reciprocal skills exchange, allowing people with tertiary level skill qualifications from both countries to gain six months experience in the other’s market.
Students at univ 1
Prior to COVID-19, trade of goods and services between Indonesia-Australia was growing. And now, as both economies emerge from COVID-19, total two-way trade has surpassed pre COVID-19 levels, reaching A$ 13,57 billion in 2021. By some estimates, Indonesia will be the world’s fifth-largest economy by 2030. IA-CEPA ensures that Indonesian and Australian businesses are well placed to diversify and share in that growth, deepening bilateral relations and supporting Indonesia’s development.
We're supported by:
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IA-CEPA ECP Katalis

Our goal is to maximise IA-CEPA benefits for Indonesia and Australia: improved market access, increased two-way trade and investment, and inclusive economic growth in Indonesia.

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