A new free trade agreement (FTA) between Australia and Indonesia will be concluded before the end of 2017, according to the leaders of both nations.

During a recent meeting between Australian prime minister Malcolm Turnbull and Indonesian president Joko Widodo, the heads of state promised that efforts will be made to accelerate progress on the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA).

Designed to promote trade and investment while driving cooperation and supporting economic partnership on a broader scale, negotiations on the FTA are said to be progressing well, with the last round of talks held earlier this month.

It will address impediments to bilateral trade, including both tariff and nontariff barriers, while mutually improving service market access and tackling issues pertaining to trade in goods, rules of origin, customs procedures and trade facilitation.

A joint statement said: "IA-CEPA will improve on commitments under our existing free trade agreement, the ASEAN-Australia-New Zealand Free Trade Agreement. It will create new openings for trade and investment to ensure the economic relationship can flourish into the future."