Trade talks: Australian Trade Minister Steve Ciobo pictured with Indonesian Trade Minister Enggartiasto Lukita in Jakarta. It does make it harder to believe the two countries will deliver the "high quality bilateral free trade agreement" Prime Minister Malcolm Turnbull said they were committed to in February. Especially given the ministers on Wednesday said they hoped the deal would now be done in November – a month earlier than expected. All the public evidence is the two sides are getting further apart. Just days ago Indonesia filed a complaint against Australia in the World Trade Organisation over anti-dumping duties imposed on A4 paper exported from Indonesia.

The duties, imposed in April, will increase the import tariff on Indonesian paper from zero to a range of 12.6 to 45.1 per cent. The Indonesian government has also expressed its "deep concern" over an investigation into the alleged dumping of steel rods exported from Indonesia. "If you want smooth sailing then you shouldn't be in politics and you shouldn't be involved in international trade," Mr Ciobo said. "There are always trade irritants, there are always challenges. However … the trade and investment climate between Indonesia and Australia continues to grow stronger. If we can successfully conclude the deal this will be the first deal Indonesia has done for over a decade." Last month Indonesia's chief trade negotiator, Deddy Saleh, told Fairfax Media Indonesia would not fully open its markets to Australia if it disrupted Indonesia's domestic industries. If you want smooth sailing then you shouldn't be in politics and you shouldn't be involved in international trade. Trade Minister Steve Ciobo

He also said that both countries would need to compromise if a deal was to be reached. The two ministers on Wednesday laughed and deflected questions about where compromise might be likely. Ciobo doesn't like to spell out where he wants change but reluctantly nominated skim milk powder. "If we were able to reduce that tariff the consequence would be that skim milk powder would potentially be cheaper here in Indonesia," Mr Ciobo said. "The reason that's important is that Indonesia uses that skim milk powder to make sweetened condensed milk which Indonesia then exports. That speaks to the types of regional supply chains where we can achieve win-win outcomes." Minister Lukita said he wanted to increase the amount of herbicides and pesticides exported to Australia "for sure" but had also suggested exporting Toyotas.

Lowy Institute research fellow Matthew Busch expressed scepticism back in March about whether the now twice-sold sugar and pesticides deal was likely to deliver "meaningful change in respect of market access for Australian exports". Told about Wednesday's exercise in press conference recycling, Mr Busch said: "This is the reality about how difficult it is to get Indonesia and Australia on the same page with trade". "That's a consequence of a bunch of different things – the relative prosperity of the countries, their histories, where they are in terms of economic reform. To find win-win solutions is difficult." Mr Busch said his instinct was that the free trade deal – known as the Indonesia Australia Comprehensive Economic Partnership Agreement – would not be as ambitious as it was at the outset. But he said it was important to get the deal done given both countries had committed to a deadline.

"There is probably some things you could do if you had more time but I think given so much has been made of it being done they should go ahead and do it." Loading



