James Massola, Jakarta – Two of Australia's most prestigious universities are considering opening new campuses in Indonesia following the signing of a landmark free trade agreement.
Indonesia and Australia's respective trade ministers, Enggartiasto Lukita and Simon Birmingham, finally put pen to paper on the Indonesia-Australia Comprehensive Economic Partnership Agreement, or IA-CEPA, on Monday – nine years after negotiations began.
The deal, which still has to be ratified by both nation's parliaments, will cover trade in goods and services, electronic commerce, investment rules, and it will eliminate 100 per cent of Australian tariffs and 94 per cent of Indonesian tariffs over time.
In the short term, it will deliver a boost to Australian farmers by allowing them to sell more beef, live cattle, cattle feed, potatoes and other produce into Indonesia.
The number of Indonesians who can take a working holiday in Australia will rise to 6000 people annually, while Indonesian exporters of petroleum, furniture, tyres and footwear will also benefit once the deal is ratified.
But it is a provision in the agreement that will allow Australian universities to retain majority ownership of up to 67 per cent in an Indonesian campus, up from the current limit of 40 per cent, that has the vice-chancellors of two Group of Eight universities – Melbourne's Monash University and Perth's University of Western Australian – weighing expansion plans.
Monash vice-chancellor Margaret Gardner told The Age and Sydney Morning Herald her university, which hosts the Australia-Indonesia centre in Melbourne and is engaged in major research projects such as the eradication of mosquitoes and in improving sanitation, was considering opening a new campus.
"Monash has been engaged over time in Indonesia and this has given us a good foundation. We have now opened an office in Indonesia," she said, adding that Monash already had campuses in Malaysia, China and India.
"Out of this new free trade agreement, to the extent it makes it easier to build educational campuses on the ground, I would be very surprised if there weren't universities actively considering the possibility of opening a campus now. Certainly Monash is looking at it," she said.
"To try and build stronger links, research links, education links, with the Indonesian population that is seeking education, I think that's important."
University of Western Australia vice-chancellor Dawn Freshwater said there was a growing push from all of Australia's Group of Eight universities to build greater education links between the two countries.
"We all agree the relationship with Indonesia is massively under-developed. This agreement is a very important signal for the developing of the economic partnership," she said.
"What we are looking at is bilateral relationships with in-country education providers and that might mean a satellite campus," she said, "given we [education providers] are the third largest export industry in Australia, any potential benefit for universities is a benefit for Australia."
Senator Birmingham has also highlighted the longer-term benefits of Australian universities and health-care providers being able to operate more easily in Indonesia.
Speaking after the deal was signed, Senator Birmingham said the IA-CEPA would ensure that "in the services sectors that we are able to provide the type of assistance in education, health care, communications and financial services that allows Indonesia to grow, to create more jobs for the youthful workforce of Indonesia's future.
"The skills partnership within this agreement is one of the landmark achievements... we believe Australian expertise can help provide training that Indonesia businesses need to be able to grow, to attract more investment, to create more jobs here into the future," he said.
Mr Lukita said that after nine years of negotiations, Canberra and Jakarta had finally landed a high quality trade deal between the two nations. He added that both countries hoped to have the deal ratified by the end of 2019.
"We have to follow procedures, we have to go to [both] parliament[s], then hopefully at the end of this year, it's already ratified and it enters into force at the end of this year [or[ start of next year."
Australian Industry Group chief executive Innes Willox said the deal was "all about market access for Australian business to a rapidly growing market on our doorstep".
"This is a market that has been seriously underdone in terms of both trade and investment, for a range of reasons, so what this agreement does is put a platform into the relationship so that when it does get buffeted around, it has something to come back to," he said.
"A lot of Australian businesses have come and gone, its been too hard for a range of reasons, but now we have this platform."
Some sections of the union movement in Australia have flagged concerns the deal could cost Australians jobs. Labor leader Bill Shorten says he supports the deal but that he wanted to study the details.
Indonesia's annual growth rate is around five per cent and it is forecast to have the fourth largest economy in the world as soon as 2030.
Despite the two nation's proximity to each other – and Indonesia's huge population of 260 million people – two-way trade was worth just $8.6 billion in 2018, well below the value of Australian trade with New Zealand, Malaysia and Singapore.