Australia-Indonesia ties likely to warm steadily

Subject

Australia-Indonesia trade, diplomatic and security ties.

Significance

An expansive Australia-Indonesia free trade and investment agreement is due to be finalised by the end of this year. This follows new Australian Prime Minister Scott Morrison and Indonesian President Joko Widodo, who met in Jakarta in August, upgrading their nations’ economic and diplomatic ties to a Comprehensive Strategic Partnership, marking a historic level of bilateral engagement, preparations for which began under Morrison’s predecessors.

Impacts

• Trade and investment will be dormant unless suppliers find new market niches and avoid commonality issues.
• Efforts to improve dialogue should reduce mistrust and aid regional-level diplomatic cooperation.
• Shared security threats will lead to greater defence cooperation, but sensitivities over terrorism and migrants will be an obstacle.
• Yet another change in Australia’s prime minister or government (the next election is in 2019) could slow deepening ties.