PM: Still work to do on trade with Indonesia

Photo / File

Despite the free trade agreement between New Zealand and Indonesia which came into force early this year there is still much to do to remove barriers to trade between the two countries, Prime Minister John Key says.

Ahead of a New Zealand-Indonesia business summit in Jakarta this morning, Mr Key told reporters the signing of the Asean Australia New Zealand Free Trade Area agreement, ratified by Indonesia early this year, "really unleashes a series of new opportunities" for New Zealand exporters.

However trade volumes between the two countries did not reflect the size of the Indonesian market and one of the reasons was that there were still obstacles in the way.

"If you talk to the ambassador he'll tell you it's still a frustrating process here. The behind the border barriers are still evident here and we need to continue to work on them.

"Fonterra will tell you it's still slow through the ports and that sort of thing. Beef's also been a bit of an issue of some debate despite the FTA .

"The FTA's a way of opening the door but it doesn't solve all of those issues, it will be an ongoing problem for us and other countries as they try and expand their activities here."

Issues around beef import to Indonesia will be discussed by Trade Minister Tim Groser and his Indonesian counterpart during the three day visit to Jakarta by the Prime Minister's delegation which includes 26 key New Zealand business leaders.

Addressing the 200 business leaders from both countries attending the New Zealand Indonesia Business Summit, Mr Key sait it was "the right time for New Zealand and Indonesia to develop even closer and deeper ties".

He noted that the two countries' relationship had featured a shared response to natural disasters.

"New Zealand was a strong supporter of post-tsunami recovery efforts in Aceh, and has contributed to recovery efforts after the more recent earthquakese in Jogjakarta and Mentawai.

"Last year, the Indonesian Government made a generous contribution to the Christchurch Earthquake Appeal for which we are very grateful.'"

Mr Key said Indonesia's progress in recent years had been extraordinary and he hoped the FTA now in force would yield a step change in trade of a similar scale to the 50 per cent increase in trade with China seen since the FTA with that country.

His visit was set yield a number of agreements for better co-operation between Indonesian and New Zealand businesses.

Earlier this morning Mr Key attended the signing of new agreement which will see Indonesia's national airline Garuda resume a Jakarta-Auckland service when conditions allowed.

Auckland Airport chair Joan Withers along with Garuda's chief executive Emirsyah Satar signed the memorandum of understanding which airport executive Glenn Wedlock said marked "a significant step towards stronger trade and tourism link" between the two countries.

Mr Key and the delegation are to pay a visit on the Association of South East Asian Nations Secretary General Surin Pitswan this afternoon and meets with Indonesian President Susilo Bambang Yudyhono tomorrow before leaving for an official visit to Singapore on Wednesday.