Australia Says Trade Agreement With Indonesia on Track Despite Israel Comments

Australian Prime Minister Scott Morrison said on Wednesday that a billion-dollar free trade agreement with Indonesia will be signed this year, despite Indonesian concern over an Australian proposal to recognize Yerushalayim as the Israeli capital.

Morrison’s willingness to reverse decades of foreign policy and follow the U.S. lead alienated many of Australia’s Asian neighbors that have close alliances with Palestinians.

It also drew condemnation from 13 Arab ambassadors in Australia who called the suggestion regrettable and asked Morrison to reconsider, or risk damaging Australian ties in the region.

Morrison said his government had been assured Indonesia would honor its commitment to the deal worth more than $11.4 billion.

“There’s been direct communication between myself and the president as well as between our foreign ministers and with the trade ministers,” Morrison told reporters in Canberra, referring to Indonesia’s President Joko Widodo.

“The Indonesian trade minister has made it very clear on the public record that is not an issue of concern to them,” he said.

The trade agreement, which has been in the works for nearly a decade, offers Australia a chance to boost rural exports, which dominates two-way trade.

Indonesia is a major importer of wheat and beef and bought more than A$3 billion of Australian agricultural commodities in 2017, according to government data.

Fiona Simson, president of Australia’s National Farmers Federation, which represents the rural sector, cautioned Morrison against any move that would threaten exports.