The trade deal with Indonesia has been in the pipeline since 2010 and was due to be signed last year, before Australia’s Prime Minister Scott Morrison proposed relocating Australia’s Israeli embassy to Jerusalem (Diego OPATOWSKI)

Jakarta (AFP) – A long-awaited trade deal between Indonesia and Australia will be signed next week, Jakarta said Thursday, after months of diplomatic tension over Canberra’s contentious plan to move its embassy to Jerusalem.

Indonesian trade minister Enggartiasto Lukita and his Australian counterpart Simon Birmingham are set to sign the multi-billion-dollar agreement in Jakarta on Monday, according to a trade ministry invitation sent to journalists.

The pact will include improved access for Australian cattle and sheep farmers to Indonesia’s 260 million people, while Australian universities, health providers and miners will also benefit from easier entry to Southeast Asia’s biggest economy.

Greater access to the Australian market is expected to spur Indonesia’s automotive and textile industries, and boost exports of timber, electronics and medicinal goods.

Bilateral trade was worth US$11.7 billion in 2017.

The deal has been in negotiations since 2010 and was expected to be signed before the end of last year but it stalled when Prime Minister Scott Morrison proposed the relocation of Australia’s embassy to Jerusalem.

Morrison first floated the shift in October, ahead of a critical by-election in a Sydney suburb with a sizeable Jewish population. Indonesia, the world’s most populous Muslim nation, was angered by the proposal.

Both Israel and the Palestinians claim Jerusalem as their capital. Most nations have avoided moving embassies there to prevent inflaming peace talks on the city’s final status — until Trump unilaterally moved the US embassy early last year.

In December, Morrison formally recognised west Jerusalem as the capital of Israel, but said the contentious embassy shift from Tel Aviv will not occur until a peace settlement is achieved.

He stood by his decision despite outcry from neighbouring Muslim countries, while Indonesia in response simply said it had noted the decision.

The deal also comes just ahead of national polls in which Indonesian President Joko Widodo is pushing his economic record in the battle for re-election.

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