Australia is set to usher in an era of increased cooperation with its Asia-Pacific neighbor, Indonesia, as the two nations press ahead with a free trade deal.

More progress took place this week as ministerial counterparts put pen to paper on an agreement to herald in stronger economic exchanges.

There have been agreements between the two countries before, and the latest one further brings about collaborative efforts and encourages new technological capabilities.

This Monday, Australian Treasurer Josh Frydenberg and Indonesian Finance Minister Sri Mulyani completed a memorandum of understanding, with new intent added to the current framework and guidelines.

Plenty of other Australian politicians have commented on the country having a strong relationship with Indonesia, with former Prime Minister Malcolm Turnbull saying as recently as last week that a bilateral agreement could be on the table before the year was out.

However, Turnbull did warn the current Australian government, led by Prime Minister Scott Morrison, that the people of Indonesia would be less than pleased if Australia decides to follow US President Donald Trump in moving its Israeli embassy to Jerusalem from Tel Aviv, its present location.

Given that Indonesia is a predominantly Muslim country, Turnbull pressed upon Australia the importance of not upsetting its partners with increased importance in the Asia-Pacific region.

Speaking to press after signing the preliminary agreement, Frydenberg said that the two nations are on the way to confirming a bilateral free trade agreement. He added: ‘Our ability to share ideas, share perspectives on economic, fiscal and taxation policy is absolutely critical to the close partnership that our countries share.’

Mulyani echoed similar thoughts, noting that she felt the meeting was ‘very productive’ and that she expects more developments to happen soon. She said: ‘In any relationship with any country, we always have ups and downs, but of what we can be very certain is that the relationship between many of the individual policymakers is always robust.’

Additionally, Mulyani said that education is a big priority in the cooperation between the two countries and that Indonesia needs to improve its education programs to make the most of the growth of its services sector.

Any free trade agreement is set to include opportunities for Australian universities to operate in Indonesia, and Mulyani believes that this can ‘transform’ the country’s current state of education into one suited for an emerging economy and stable growth.

Presently, according to Mulyani: ‘By law, it’s very difficult for us to open up a foreign university in Indonesia.’ She said that this problem could be solved by setting up special economic zones that are exempt from these rules and would allow Australia to invest in these jurisdictions while establishing campuses.

Mulyani steadfastly avoided answering any questions about whether Australia moving its embassy in Israel could alter the path of negotiations, but she did have some words for current US foreign policy.

Saying that there needs to be a way out of the current burgeoning trade war between the US and China, she added that unless mitigation occurs, those involved in the supply chain would suffer. However, Mulyani does view the agreements that the US recently made with both Mexico and Canada positively.