Indonesia has agreed to fully restore defence co-operation with Australia following formal talks between Prime Minister Malcolm Turnbull and visiting Indonesian President Joko Widodo.
Indonesia had partially suspended ties early last month after an Indonesian officer took offence to apparently insulting materials found at an Australian military training facility.
Mr Turnbull made the announcement at Kirribilli House on Sunday with Mr Widodo by his side.
“President Widodo and I have agreed to the full restoration of defence co-operation, training exchanges and activities,” he told reporters.
The rift centred on materials discovered by the officer which reportedly insulted Pancasila, the Indonesian national philosophy.
Mr Widodo is wrapping up his two-day tour after sharing a private dinner at Mr Turnbull’s Point Piper mansion on Saturday and an early morning walk through the Botanic Gardens with the prime minister on Sunday.
The two later sat down for official talks with Australian cabinet ministers where they agreed to stronger ties on a range of areas including trade, counter-terrorism and maritime strategy.
The two sides signed a joint declaration to boost maritime security, include sharing information to combat transnational crime at sea.
They also emphasised the importance of freedom of navigation in, and overflight, above the South China Sea.
While both pledged to wrap up a long-awaited bilateral trade agreement this year, some sweeteners have already been negotiated.
Australian exporters will have sugar tariffs in Indonesia reduced to five per cent, while Australia has agreed to eliminate tariffs on pesticides and herbicides.
Australia will also open a new consulate in Surabaya, Indonesia’s second-largest city, while three more Indonesian language centres will be opened in Australia.
Mr Widodo said a robust relationship could only be established if both sides had respect for each others’ territorial integrity.
“No interference into the domestic affairs of each other,” he said through an interpreter.
He said most of the bilateral issues had been worked through at the private dinner and morning walk.
The president is due to meet members of the local Indonesian community at a cultural event in Darling Harbour in the afternoon before flying home.
Originally published as Aust-Indon defence co-operation restored