DENPASAR, July 27: Australia and Indonesia have agreed to launch a feasibility study on a free trade pact, their leaders said on Friday after meeting on the Indonesian resort island of Bali.

Australian Prime Minister John Howard held talks with Indonesia's President Susilo Bambang Yudhoyono for about 45 minutes during his seven-hour visit, during which he opened an eye clinic and a new consulate.

Howard told a press briefing they had discussed the countries' economic relations. “I welcomed during that the fact that we have agreed to do a joint study about the feasibility of a free trade agreement between our two countries,” he said.

“The more that we can develop those investment links, the closer will become the bonds between our two societies,” he added.

—AFP