By Kanupriya Kapoor
JAKARTA (Reuters) - Australian Prime Minister Tony Abbott skirted the question of asylum seekers in talks on Monday in Indonesia, an issue which has threatened to overshadow his first visit overseas since taking office.
Just days before his visit, at least 31 would-be asylum seekers died when their boat sank off the southern coast of Indonesia, a common transit point for refugees trying to make their way to Australia and against whom Abbott's government has promised to take a tougher line. Over 20 people were missing.
Rather, Abbott stressed trade ties between the two neighbors which stood at US$10 billion in 2012, dominated by mining and agriculture.
"The fact that there is a very strong and high-level delegation of business leaders travelling with me to Indonesia as part of this visit testifies to the desire of the Australian people to build a much stronger...economic relationship based on greater trade and investment," he said in a joint statement after talks with Indonesian President Susilo Bambang Yudhoyono.
In his first overseas state visit since taking over as prime minister on September 7, Abbott played down diplomatic tensions over refugees.
Ties with Yudhoyono's administration have been largely cordial for nearly a decade. But Abbott's conservative administration got off to a rocky start over asylum seekers who make their way via Indonesia.
Yudhoyono too put aside any suggestion of rancor over the issue which has become an emotional political debate in Australia.
"Australia and Indonesia are both victims with regard to the issue of people smuggling and boat people. For instance, there are many people from the Middle East and other nations who come here and become a social and economic burden for Indonesia ... The solution to overcome this problem is effective cooperation between Indonesia and Australia," Yudhoyono said.
Abbott's party raised hackles in Jakarta with new policies which Indonesians took to suggest violating their country's sovereignty. One was a proposal to pay Indonesian villagers for information on people smugglers and to buy boats used for smuggling.
"People smuggling is an issue of sovereignty, especially for Australia," Abbott said. "...But I do want to stress Australia's total respect for Indonesia's sovereignty."
Indonesian Foreign Minister Marty Natalegawa said in New York last week that any unilateral steps taken by Australia over the issue would put relations at risk.
His comments, which were made during a private meeting with Australian Foreign Minister Julie Bishop, were circulated among journalists. The Indonesian Foreign Ministry later said the comments were distributed in error.
About 400 boats carrying asylum seekers have arrived in Australia over the past 12 months and about 45,000 asylum seekers have arrived since late 2007, when the former Australian Labor government relaxed border policies, eventually tightening them again in the face of a voter backlash.
Australian media reported members of the business community there were concerned about the impact of diplomatic tension on business ties between the neighbors.
(Editing by Jonathan Thatcher)