Indonesian free trade pact to help Australian universities, hospitals
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Indonesian free trade pact to help Australian universities, hospitals

Jakarta: Australian universities and health providers could be two of the big winners after Australia and Indonesia finally agreed on key details of long-awaited free trade agreement.

And Australian farmers will receive certainty in the form of annual quotas which will determine the volume of beef, live cattle, potatoes and other agricultural products that can be exported to Indonesia.

Sofyan Wanandi, a senior official in the office of Indonesian Vice President Jusuf Kalla, told Fairfax Media the two nations had finally completed negotiations on the deal late on Thursday evening.

The new Australian Prime Minister Scott Morrison, who arrived in Jakarta late on Thursday evening, will meet Indonesian President Joko “Jokowi” Widodo at his Palace in Bogor on Friday and the pair will announce the formal end of negotiations.

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The pair are also expected to announce the relationship between the two nations will be upgraded from "comprehensive partnership" to "comprehensive and strategic partnership".

Mr Sofyan said the finalisation of the free trade agreement was “very good news for both countries. Negotiations took a very long time, it had gone [for] more than five years, I think. It’s such a long and tough negotiation."

Australian PM Scott Morrison arrives in Indonesia.

Australian PM Scott Morrison arrives in Indonesia.Credit:AAP

“We [Indonesia] decided to open our education sector to foreign investment. So Australian universities can invest in Indonesia but they have to work together with Indonesian universities.”

“It means we can improve the quality of our human resources. Also, Australian hospitals can enter Indonesia but limited only to specific services [such] as in chronic diseases.”

“Also we agreed on annual quota for live cattle, beef and other Australian agricultural product like potatoes.”

It’s understood the deal will allow, for the first time, Australian universities to set up campuses in Indonesia and retain a majority ownership of up to 67 per cent.

Concluding a trade deal: posters of Australian Prime Minister Scott Morrison (left) and Indonesian President Joko Widodo.

Concluding a trade deal: posters of Australian Prime Minister Scott Morrison (left) and Indonesian President Joko Widodo.Credit:AAP

At present, the limit on foreign ownership of universities is 40 per cent.

For Indonesia, one of the main benefits will be most goods exported to Australia will have tariffs removed, including in the textile and garment sector.

“We couldn’t compete with Vietnam in the Australian market because Vietnam already has [an] FTA with Australia.”

The Comprehensive Strategic Partnership declaration will "highlight five pillars": the economy, security cooperation including cyber security and combating terrorism, maritime cooperation, people-to-people contact and regional cooperation.

Australia has recently reached similar agreements with Singapore and Vietnam, and is being struck at a time when China’s influence in the region is making its neighbours increasingly nervous.

The agreement to sign a free trade deal, known as the Indonesia Australia Comprehensive Economic Partnership Agreement or IA-CEPA, is the culmination of years of negotiations.

Former prime minister Malcolm Turnbull and Mr Joko both invested heavily in pushing for the deal to be struck.

The actual trade deal will be signed in about two months time by both nation’s trade ministers after the document has been translated into Indonesian and a process called legal “scrubbing” is undertaken by both sides, which will ensure the deal complies with local laws.

James Massola is south-east Asia correspondent, based in Jakarta. He was previously chief political correspondent for The Sydney Morning Herald and The Age, based in Canberra. He has been a Walkley and Quills finalist on three occasions.