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Indonesia pushes for Australia to import more palm oil and paper

JAKARTA, Indonesia (From the Newcastle Herald) -- One of Indonesia's top trade officials has questioned whether "artificial" trade barriers are preventing Australia importing more palm oil, pulp and paper and wood products as the two countries negotiate a free trade deal to be concluded this year.

In an interview ahead of this week's Australian trade mission to Indonesia, Thomas Lembong said President Joko Widodo had been "revolutionary" in changing Indonesia's historical mindset of "insecurity and fear of globalisation".

However, Mr Lembong, the chairman of Indonesia's Investment Co-ordinating board, said Indonesia had to acknowledge that its regulations - which "change very frequently and often with no prior notice" - were a big obstacle to investment and a big source of complaints for foreign and domestic investors.

During his visit to Australia last month, President Jokowi, as he is popularly known, said he had conveyed to Prime Minister Malcolm Turnbull some of the key issues in the free trade deal. The first was the removal of trade barriers - both tariffs and non-tariffs - for Indonesian products such as paper and palm oil.

"As you can imagine, as a country that is posting large and persistent trade deficits with Australia, we are especially motivated to look at opportunities to balance the trade," Mr Lembong told Fairfax Media.

"Certainly the products where we are extremely strong and extremely competitive would be, palm oil, pulp and paper products and wood products."

Mr Lembong said Indonesia wanted to make sure there were not artificial barriers or constraints to the export of these commodities. "In a way it's a bit of a test right? Why isn't that trade happening? We can talk goodwill all we want but ultimately we have to see concrete proof of unfettered and natural trade. If even the commodities in which we have the lowest cost, the strongest comparative advantage are not entering the Australian market, it feels like something might be wrong."

Meanwhile, the Construction, Forestry, Mining and Energy Union has campaigned against "dumping" of paper products by Indonesia, Brazil, Thailand and China and called on the federal government to impose tariffs on imports.


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