By Matt Siegel
SYDNEY (Reuters) - Australia and Indonesia on Wednesday said they would formally resume long-stalled negotiations aimed at sealing a bilateral trade agreement between the often uneasy neighbours within 18 months.
Australian Trade Minister Steven Ciobo and Indonesian Trade Minister Thomas Trikasih Lembong said in a joint statement talks would resume in May after a lengthy hiatus spanning a period of diplomatic tumult.
Australian Prime Minister Malcolm Turnbull visited Indonesia last year in the hope of smoothing over ties strained by rows over spying, the execution of Australian citizens in Indonesia and Australia's tough asylum-seeker policies.
Indonesia is Southeast Asia's largest economy but is Australia's twelfth largest trading partner, with two-way trade worth just under A$12 billion ($8.95 billion)in 2015.
"While Indonesia is a close neighbour and firm friend, our trade and economic relationship can and should be performing better," Ciobo said in a statement.
"I am pleased to announce the reactivation of the Indonesia-Australia Business Partnership Group to ramp up business links."
Australia's live cattle exports to Indonesia have been a source of friction as Indonesia, trying to develop self-sufficiency in its livestock market, has thrown up barriers to Australian imports.
Lembong suggested that the live cattle export issue may be put aside in the hope of reaching a broader agreement more quickly.
"Sometimes maybe we need to call time out on the most contentious issues and work on areas where we can more easily find common ground," he told reporters in Canberra.
"Personally, my priority is to try to broaden the dialogue so we don't get bogged down on old issues of contention."
Australia and its giant neighbour have a history of diplomatic turbulence stretching back decades, but relations reached historic lows under former Australian Prime Minister Tony Abbott, who was ousted in a party coup in September.
Just one month after he took office in September 2013, revelations that Canberra had spied on President Susilo Bambang Yudhoyono and his wife sent relations plummeting.
Abbott's policy of towing back to Indonesia vessels carrying asylum seekers, while popular at home, infuriated Jakarta, which sees it as an infringement on its sovereignty.
Tension reached a peak in May 2015 when Indonesia executed two Australian members of the so-called "Bali Nine" drug trafficking ring, despite intense lobbying from Canberra.