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Indonesian foreign minister signals trade talks not coming any time soon

By Michelle Zilio | Aug 23, 2013 1:27 pm | | 0 Comments | Edit

While Indonesia is keen on increasing trade with Canada, its foreign affairs minister said the Southeast Asian country is not ready to consider a bilateral free trade agreement until Canada and Indonesia get to know each other better. Foreign Minister Marty Natalegawa made the comments in a sit-down interview with iPolitics Friday at the Indonesian embassy in Ottawa before his meeting with Canadian Foreign Affairs Minister John Baird Friday afternoon in Chelsea Quebec where the pair discussed the bilateral relationship between the two countries, including talks of trade and investment. The meeting was billed as the Third Bilateral Consultative Forum between the Republic of Indonesia and Canada. While Natalegawa said he was eager to discuss Canada and Indonesias growing bilateral trade, which was valued at approximately $3 billion in 2012, he did not firmly indicate whether Indonesia was on board with a free trade agreement with Canada. Its not an either-or like that. I think we are always looking for ways and means for the enhancement of trade relations, he said. Free trade arrangements or agreements are always a means to an end. We should be focusing really on the objective, what we are seeking to achieve, then we will be able to see many pathways to be able to achieve that. Natalegawa said Canada and Indonesia need to get to know each other better before such a deal could be considered. As of now, we do believe that the principal constraints or the principal challenge that we have to overcome is one of getting to know one anothers potentials better. What Canada can offer, what Indonesia can offer. Prime Minister Stephen Harpers Conservative government has actively pursued free trade deals with the European Union, China,

India and other smaller countries such as Singapore and Turkey. While Indonesia and Canada have not formally entered free trade negotiations, the two countries are currently participating in ongoing negotiations for a Foreign Investment Promotion and Protections Agreement (FIPA). A FIPA is a bilateral agreement aimed at protecting and promoting foreign investment through legally-binding obligations. The FIPA is especially important to Canadian business owners investing in various Indonesian markets including oil and gas, mining, and information and communication technology. The two countries have not held a formal round of FIPA negotiations since April 2012, according to DFATDs website. According to Natalegawa, the deal is held up by an ongoing internal review of investment law in Indonesia. He maintained that investment has not been affected by the stalled negotiations. We consider such a protection of investment agreement is very important, as part of the elements to promote greater investment and relations, said Natalegawa . There hasnt been any bottleneck or any impediments caused by the fact that this agreement had not been reached. Natalegawa did not indicate a timeline for the conclusion of FIPA negotiations. On the regional trade front, Natalegawa also discussed the possibility of Canada joining the Regional Comprehensive Economic Partnership (RCEP) trade negotiations, which began in 2013 and are scheduled to conclude by the end of 2015. RCEP is also known as the Association of Southeast Asian Nations (ASEAN) plus six Australia, China, India, Japan, South Korea and New Zealand. If negotiated successfully, RCEP would become the worlds largest trading bloc. While Natalegawa did not indicate if he supports Canadian

membership in the RCEP, he said Canadas chances at joining the trade block would depend on its value to both individual ASEAN countries and the region. I guess whether Canada should be part of this endeavour (RCEP), it really depends on the substance of bilateral relations in terms what is the depth and the significance of Canadas trade relations, economic relations with individual ASEAN member countries. Back on Canadian soil, Natalegawa said Indonesias state-owned oil company Pertamina has not ruled out the possibility of investing in the Canadian energy sector. However, he did not indicate if Indonesia would consider buying into the Alberta oil sands crude, as Chinas state-owned CNOOC Ltd. did in February when it purchased Canadas Nexen Inc. The state oil company of Indonesia is beginning to look overseas to find new opportunities in terms of cooperation, said Natalegawa. I am sure that in that quest they will be looking at many possibilities, including Canada. In Chelsea, in addition to the discussion on trade and investment front, Baird and Natalegawa signed a memorandum of understanding between DFATD and Indonesias National Agency for CounterTerrorism on programming related to counterterrorism capacity building. Terrorism remains the great struggle of our generation, said Baird in a statement Friday. Canada and Indonesia are strong partners committed to countering the scourge of terrorism and crime. Canada and Indonesia will meet again in October at the Asia-Pacific Economic Cooperation (APEC) CEO Summit in Bali, Indonesia. Natalegawa said he looks forward to hosting Harper during a separate bilateral visit to Indonesia following the APEC conference. According to a report from Miraj News Agency in Jakarta, that visit will take place in December. But in an email to iPolitics, a spokesperson for the Prime Ministers Office said they could not

confirm the visit so far in advance.

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