John Key at the Indonesia Forum 2012

By Brierley Penn

Potential was the common theme underlying the speech of the Prime Minister, and in fact, the conference as a whole, at the Indonesia Forum. New Zealand’s relationship with Indonesia is one of strength, however, it is imperative to build upon this further to capitalize on the opportunities offered by the region’s growth. Key cited Indonesia’s high growth rate, and its centrality to the stability and prosperity of South East Asia as crucial factors that are determinative of the country’s significance to New Zealand and its future in international trade.

The Prime Minister’s speech underlined  his government’s commitment to growing the relationship between New Zealand and Indonesia. He cited the strengths of the current trade links, the recent trade delegation which he led to Indonesia earlier this year and the high level of contact through forums including APEC and the East Asia Summit. The PM also announced the appointment of a Tim Anderson as NZ’s first Trade Commissioner specifically focused on Indonesia. This marks a departure from the previous policy of appointing a joint Commissioner to cover Malaysia, Indonesia and Brunei.

The ASEAN-Australia-New Zealand Free Trade Agreement  opens up the prospect of greater trade and enhanced relations between the two regions. The Prime Minister praised this agreement as being an FTA of the highest quality, and expressed his desire to see benefits on a similar level to those seen following the signing of the China FTA in 2008. Exports to China have trebled since that time.

However, while exporters will see the progressive elimination of tariffs on 99% of current exports to ASEAN economies, Key recognized the importance of ensuring that informal trade barriers do not arise to replace those which have been abolished by the FTA.

Indonesia has developed a focus on food security, energy security and education, and the government is confident that New Zealand can act as a strong strategic partner in all of these areas. The Prime Minister suggested that use of the ASEAN FTA as a benchmark for the new Regional Closer Economic Partnership, could be of significant benefit to both countries.  “We see the FTA as a means of developing… business partnerships, two-way investment, and a vibrant trade in services.”

Opportunities abound in the growing Indonesian market. The Prime Minister’s speech displayed a clear intention to use these prospects for the mutual benefit of the two countries, establishing a key partnership with our closest Asian neighbor.