CANBERRA, March 4 (Xinhua) -- Australia and Indonesia signed a landmark free trade agreement (FTA) on Monday after years of negotiations.

Australia's Minister for Trade, Tourism and Investment Simon Birmingham joined his Indonesian counterpart Enggartiasto Lukita to sign the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) in the Indonesian capital Jakarta.

Both Australia and Indonesia rank in the world's top 20 economies but are not in each other's top 10 trading partners despite being close neighbors.

"Bolstering economic ties between our nations will create new trade opportunities for Australian and Indonesian businesses, boost two-way investment and increase prosperity in both countries," Birmingham and Prime Minister Scott Morrison said in a statement on Monday.

"With a population of 270 million and high levels of economic growth, Indonesia is on track to become one of the world's largest economies. This makes the strengthening of our ties both strategically and economically important.

"This is a great deal for Australia: it means that 99 percent of Australian goods (by value) will enter Indonesia duty-free or under significantly improved preferential arrangements by 2020."

In addition, the FTA deal will also provide major benefits for Australian universities and healthcare providers, clearing the way for them to set up shop in Indonesia.

On the other side of the equation, the agreement will eliminate all tariffs on Indonesian imports to Australia and the number of Australian work and holiday visas will rise from 1,000 to 5,000 within six years.

The parliaments of both nations must ratify it before it is enacted, a process that could take months given that Indonesia will hold a general election in April and Australia will do so in May.

Australian trade unions on Monday escalated their campaign against IA-CEPA, expressing fears it would increase the number of foreign workers in Australia, a notion that Birmigham described as "blatant scaremongering."

Asked if he would support the deal to ensure it is ratified as soon as possible, Bill Shorten, leader of the Opposition Australian Labor Party (ALP) and a former union organizer, said his party is "positively disposed" to the deal.

"We'll have to study the detail, as you always do - we want to make sure that Australian jobs are prioritized - but we're very positive from what we've seen so far," he told reporters in Melbourne.

The landmark FTA has been welcomed by both the Business Council of Australia (BCA), Australia's largest group representing the interests of businesses, and the National Farmers' Federation (NFF).

"This is an important agreement for a large developing country like Indonesia, and it demonstrates both Australia's and Indonesia's commitment to rules-based global trade at a time when the voices against freer and more liberal trade are increasingly loud," BCA chief executive Jennifer Westacott said.

Minister for Industry, Science and Technology Karen Andrews hailed the agreement, saying IA-CEPA would help to further strengthen Australia's economy, as well as ties between the two countries.

"IA-CEPA will help drive more growth for Australian businesses by creating exciting new market opportunities in Indonesia," the minister said in a statement.

"Importantly, Australia's merchandise exports to Indonesia were approximately 7 billion Australian dollars (about 5 billion U.S. dollars) in 2017, making Indonesia Australia's 9th largest export market in 2017."