SINGAPORE (Kyodo) -- Indonesia said Monday it will delay signing a free trade deal with Australia if it acts to move its embassy in Israel from Tel Aviv to Jerusalem.
The Palestinians want Jerusalem to be the capital of an independent nation of Palestine, and view the recent transfer of the U.S. embassy to Jerusalem, followed now possibly by Australia, as tightening Israel's grip on the contested city.
In August, Australia and Indonesia announced the substantive conclusion of negotiations over an Indonesia-Australia Comprehensive Economic Partnership Agreement and agreed to sign it by the end of this year.
However, after Australian Prime Minister Scott Morrison recently said he would consider moving the Australian embassy to Jerusalem, Indonesia, the world's largest Muslim nation, expressed its opposition.
"It (the FTA) can be signed anytime, but when you will sign it...depends on Australia's position" on the embassy issue, Indonesian Trade Minister Enggartiasto Lukito told reporters on the sidelines of the East Asia Summit in Singapore.
Indonesian Foreign Minister Retno Marsudi has "stressed that if Australia insists on moving its embassy to Jerusalem, the signing will be delayed," Lukito added.
The agreement would allow 99 percent of Australia's merchandise exports to enter Indonesia either duty free or under significantly improved preferential terms, while all Indonesian goods exports would enter Australia duty free.
Indonesia is a staunch supporter of Palestine, repeatedly advocating for a two-state solution to the Israeli-Palestinian conflict. It has committed to prioritizing the issue during its term as a nonpermanent member of the U.N. Security Council, effective from 2019.