Indonesia asks Australia to lift travel advisory

JAKARTA, June 25 (Reuters) Indonesia urged Australia on Monday to lift a travel advisory on the country, saying it could hamper commercial ties between the two countries at a time when they are trying to hammer out a free trade pact.

Australia has cautioned Australians about travelling to Indonesia, including Bali, due to terrorist threats.

Indonesia has seen a string of bombings in recent years, including the 2002 Bali nightclub bombings that killed more than 200 people, many of them foreign tourists.

''The travel advisory could disrupt travel not only for tourism but also potential investors and buyers,'' Indonesia Trade Minister Mari Pangestu told a news conference after meeting her Australian counterpart, Warren Truss.

''We propose that Australia make a review based on progress that has happened in Indonesia.'' Truss, who is in Jakarta for an annual bilateral trade and investment meeting, said the Australian government had assured Indonesia it would review its travel advisory on a quarterly basis.

''Our warning has been revised and taken into account the improved security situation in Indonesia. And we will continue to do that,'' Truss said.

The ministers were speaking as an Indonesian-Australia panel of experts recommended a feasibility study for a possible free trade agreement.

''That will be undertaken presumably jointly by governments and by experts, to help us assess what the potential benefits are from an FTA, what issues would need to be resolved, and whether or not we could actually progress to that formal negotiation stage,'' Truss said.

If approved by the respective governments, the feasibility study could take about a year to complete, he said.

Indonesia exports gold, paper, cables, natural rubber products, wood products and furniture to Australia, and imports agricultural products such as beef and wheat.

An FTA with Australia would help Indonesia achieve its target of 6.3 percent economic growth this year, said Pangestu.

''Australia is one of our closest neighbours. We see Australia as one of our import markets and potential investors in various sectors, not just mining,'' she said.

''There is a lot of potential which we feel, given the closeness of our countries, is still underdeveloped.'' The total trade value between Indonesia and Australia stood at 5.75 billion dollars in 2006, up 20.08 per cent from 4.79 billion dollars in 2005, data from the Indonesian trade ministry shows.

Between 1967-2005, there were 663 Australian investment projects in Indonesia valued at a total of 9.3 billion dollars which put Australia among the 10 largest foreign investors in Indonesia.

REUTERS SKB VC1830