Primrose Riordan – Indonesia and Australia have patched up their defence relationship after a dramatic public spat on Indonesian President Joko "Jokowi" Widodo long awaited visit to Sydney as the countries mull how to lower tension in the South China Sea.
The Indonesian side also agreed to lower sugar tariffs for Australian exporters, while Australia will cut tariffs for pesticides and herbicides coming into the country from Indonesian suppliers.
After Mr Widodo told The Australian last week he would raise joint Australian-Indonesian patrols in the South China Sea on the visit, foreign policy experts and Indonesian officials dampened expectations such a move would occur.
"I think it's very unlikely that Indonesia will agree to do coordinated patrols in the South China Sea. Indonesia is very wary of being seen to be aligned with a US ally on this particular issue," Lowy Institute research fellow Aaron Connelly said.
An Indonesian government source said it is possible instead there could be coordinated patrols in the Sulu Sea, off the Philippines. Mr Connelly said this was a possibility.
"The Sulu is an area where Indonesia already cooperates with Malaysia and the Philippines on these issues. So to add additional cooperation with Australia [it] would be much easier [as] the framework for that cooperation is already in place, and it's far less contentious," he said, adding it would not been seen as being as provocative to Beijing.
In January, the Indonesian military announced it would suspend defence ties after offensive material was found at a Perth base where both country's special forces conduct joint training.
The head of Indonesia's armed forces, General Gatot Nurmantyo said the reason he made the decision to suspend military co-operation was there were "hurtful" teaching materials saying that West Papua, which Australia recognises as part of Indonesia, should be independent and other materials mocking Indonesia's founding principles, the Pancasila.
The suspension was then essentially downgraded so it only applied to language courses partaken in my Indonesian special forces. Mr Turnbull said these classes would now resume and full cooperation was restored.
The leaders issued a joint statement issued and were careful to avoid any direct criticism of China. But the statement called on all countries to abide by the international court ruling against Chinese constructed islands in the contested waters. The leaders also signed a Maritime Cooperation agreement which focused on "maritime border protection" and the increasing issue of illegal fishing.
"Australia and Indonesia further recognised that illegal, unreported and unregulated fishing is a complex and growing problem," the joint statement read.
In a sign of the sensitivity of the matter, Mr Widodo started his statement by saying the Australian government had agreed not to interfere in Indonesia's domestic affairs and Mr Turnbull reiterated Australia's commitment to the Lombok treaty where Australia agreed to respect Indonesian sovereignty over West Papua.
"The bedrock of [the Australia-Indonesian relationship] is the Lombok Treaty and our absolute respect for, support for, solidarity with Indonesia, its territorial integrity," Mr Turnbull said.
Both leaders said they expect to complete negotiations for the Indonesia-Australia Comprehensive Economic Partnership Agreement by the end of the year. Mr Widodo said Indonesia would push for lower tariffs and restrictions on paper and palm oil. The comments come after the head of Indonesian investment policy, Thomas Lembong said Australia imports too much palm oil from Malaysia.
"There's an observation that for example where Australia does import palm oil it tends to import it more from Malaysia, fairly or unfairly so," Mr Lembong said on Saturday.
One of the more important moves of the visit was the announcement on Saturday that Indonesia will now give Australian live exporters more certainty by introducing longer one-year permits and increasing export weight limits. Along with an increase in the age limit, the weight limit will increase from 350kg to 450kg for live feeder cattle.
There were also a number of other announcements signaling a strengthening of the bilateral relationship. Australia will open new consulate in Surabaya and Indonesia are set to open three more Bahasa language institutes in Darwin, Brisbane and Sydney.
Mr Widodo will leave Australia on Sunday night.