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Tuesday, 28 June 1994
Page: 2068


Senator CHILDS —I direct my question to the Acting Prime Minister, Minister for Foreign Affairs and Acting Minister for Trade. In the light of the current visit to Indonesia of the Prime Minister and other ministers, what is the significance and the implications for Australia of the tariff cut package announced by the Indonesian government yesterday?


Senator GARETH EVANS —I am touched by Senator Childs's reference. Nobody else seems to have noticed. I am following very big shoes in those of Senator Robert Ray of a week or two ago, and I am conscious of my responsibilities. My answer to Senator Childs's question will complement that which was given a few minutes ago by Senator Collins. I join with Senator Collins on behalf of the government in very warmly welcoming the latest package of competitive measures to be implemented by the Indonesian government that were announced yesterday.

  While the full scale of what is a very detailed package has not yet been fully digested, the measures in the broad consist of a reduction in tariffs—some to zero—for over 700 items and a reduction in non-tariff barriers on 27 commodities, mainly food. On the tariff side, the heavy emphasis is on capital goods, principally textile and other industrial machinery, to support Indonesia's booming manufacturing sector. This package will provide opportunities for Australian exporters to the Indonesian market and the government will be examining over the next few weeks the package very closely for the prospects that it offers and we will be advising firms through the established market intelligence processes.

  This trade reform package is particularly welcome as it will provide real tariff cuts which are deeper than Indonesia's Uruguay Round commitments to tariff bindings and reductions. It is a further positive sign that much of the reluctance to move unilaterally on tariffs that has so often been ascribed to the developing economies—and, I have to say, in the past correctly ascribed to them—is in fact melting away in today's world of globalised production.

  This package announced yesterday follows the significant deregulation of foreign investment which was announced by the Indonesian government earlier this month. Moreover, it is part of a very significant program of progressive micro-economic reform measures which have been proceeding for some six years. Both of these recent packages—and, indeed, the whole process of reform that has preceded them—testify to Indonesia's commitment to increase economic competition, to become more attractive to foreign investment and to generally open up what has been notoriously a highly regulated economy.

  Such steps, in turn, will enable Indonesia to continue to play a progressive role in the trade facilitation and liberalisation work of APEC, the second leaders meeting of which President Suharto will be hosting in Jakarta in November this year. The announcement also forms a very positive backdrop to the Prime Minister's visit to Indonesia, to the trade and industry exhibition and to the business and investment forum that he will be opening in Jakarta tomorrow. A large number of Australian business people will have the opportunity at this business forum to examine directly this package, as will my colleague Bob McMullan who is in Indonesia leading, as has been said, the largest business mission to ever leave Australia.

  Might I say finally just this: at a time when concern is being expressed about some other aspects of Indonesian government policy, it is important to appreciate on just how many fronts the modernisation and internationalisation of Indonesian society are proceeding. I think the larger and the longer term significance of that should be self-evident—


Senator Hill —Press freedom.


Senator GARETH EVANS —even to Senator Hill.