SYDNEY (Reuters) – Australian Prime Minister Scott Morrison said on Wednesday a billion-dollar free trade agreement with Indonesia will be signed this year, despite Indonesian concern over an Australian proposal to recognize Jerusalem as the Israeli capital.
Morrison said on Tuesday he was open to Australia moving its mission from Tel Aviv to Jerusalem, as the United States did in May to the delight of Israel but to the fury of Palestinians.
Morrison’s willingness to reverse decades of foreign policy and follow the U.S. lead alienated many of Australia’s Asian neighbor 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, who faces a critical by-election on Saturday that will determine whether his government keeps its one-seat majority, said his government had been assured Indonesia would honor its commitment to the deal worth more than A$16 billion ($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.
Indonesia is the world’s biggest Muslim-majority country, where the Palestinian question is a sensitive issue and tens of thousands protested against Trump’s decision to move the U.S. embassy to Jerusalem.
Indonesian Foreign Minister Retno Marsudi, speaking at a news conference with Palestinian Foreign Minister Riyad al-Maliki in Jakarta on Tuesday, called on Australia to avoid any step that would threaten efforts to forge peace in the Middle East.