New doubts over when Indonesia-Australia free trade deal will be signed

Jakarta: The signing of the Indonesia-Australia free trade deal could now be delayed, with Indonesian Trade Minister Enggartiasto Lukita admitting disquiet over the potential move of the Australian embassy in Israel from Tel Aviv to Jerusalem could push back the signing date.

And Mr Lukita has suggested that Australian Foreign Minister Marise Payne needs to pick up the phone and speak to her Indonesian counterpart, Retno Marsudi, to address Indonesian concerns over the embassy move.

Former trade minister Steve Ciobo (right) meets with former former Indonesian trade minister Thomas Lembong (left) and current Indonesian Trade Minister Enggartiasto Lukita.

Former trade minister Steve Ciobo (right) meets with former former Indonesian trade minister Thomas Lembong (left) and current Indonesian Trade Minister Enggartiasto Lukita.Credit:Jewel Topsfield

Fairfax Media revealed this week that the Indonesia-Australian Comprehensive Economic Partnership Agreement, the formal name for the trade deal, had been translated and legally 'scrubbed' to ensure it complied with both nations' laws and was ready to be signed.

The date pencilled in for the signing was November 14 at an ASEAN meeting in Singapore which Prime Minister Scott Morrison and President Joko Widodo will attend. The pair will hold a short bilateral meeting at the event.

Indonesia has suggested that Australian Foreign Minister Marise Payne (pictured) needs to pick up the phone and speak to her Indonesian counterpart to address Indonesian concerns over the embassy move.

Indonesia has suggested that Australian Foreign Minister Marise Payne (pictured) needs to pick up the phone and speak to her Indonesian counterpart to address Indonesian concerns over the embassy move.Credit:AP

But while the document has been finalised, Mr Lukita on Friday hinted at unease in Kemlu, the Indonesian Foreign Ministry, over the possible Australian embassy move – given the status of Palestine is such a politically sensitive issue in Indonesia, and recognition of Jerusalem as Israel's capital would be politically controversial – and said that Kemlu still needed to give approval for it to go ahead.

"We're waiting for a signal from the foreign minister [Ms Marsudi]. I met Simon [Birmingham], the Australian trade minister recently in Shanghai and told him 'our job is to finalise it. At any time we can sign.' So we [from the trade ministry] can sign it at anytime. It's done," Mr Lukita said.

"I also met my best friend, Steve Ciobo [the previous Australian trade minister] recently. He made a big contribution to this agreement. I told him, 'this is the time [Australia's] foreign minister should contact my foreign minister.' And he understood. This is regarding Palestine. We all know this. Because it [the trade deal] should of course be in accordance with our foreign policy, right?"

Mr Lukita's comments – and the potential delay in the signing – highlight just how politically sensitive the embassy move, which was flagged by Mr Morrison during the Wentworth by-election, is in Indonesia. They also underscore the division and debate within the Indonesian government over how to handle the issue.

Asked directly on Friday if Indonesia would refuse to sign the deal if Australia followed through and moved its embassy to Jerusalem, Mr Lukita declined to answer.

"[I will] let the foreign minister answer this. I won't do [the signing] without any agreement with Kemlu because foreign policy lies with Kemlu," he said.

Ms Marsudi refused to answer questions from Fairfax Media about the deal after an event in Jakarta on Friday.

The Indonesian Trade Minister also suggested that he would prefer to see the trade deal signed in Indonesia or Australia, not Singapore.

"If you ask me I of course would like to do it in my own country. Why it should be done out there [in Singapore]? Or if we have to choose [it should be either] here or Australia. But of course I prefer to do it here."

Fairfax Media also contacted Mr Birmingham for comment on Friday.

Analysts have previously warned that if the embassy move went ahead, at the very least, ratification of the deal by Indonesian's Parliament could be delayed because of the political sensitivities over the move during an election year.

Mr Morrison has promised a review of the embassy move but has not said when that review will conclude.

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