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Australia's Prime Minister Kevin Rudd greets Indonesia's President Susilo Bambang Yudhoyono - Source: Reuters
Australia awarded Indonesian President Susilo Bambang Yudhoyono its highest civilian honour ahead of thorny negotiations on border security and a free trade pact now dragging for more than three years.
"President Yudhoyono is a true friend of Australia. President Yudhoyono has also been a champion of democracy and of economic development for the people of Indonesia," Australian Prime Minister Kevin Rudd said announcing the Order of Australia award for the former general.
Yudhoyono began a three-day visit to Canberra for talks on expanding the A$9.3 billion two-way trade relationship and slowing an influx of asylum seekers using Indonesian ports as a jumping off point and hurting Rudd's popularity at home in an election year.
Yudhoyono is seen in Canberra as the most pro-Australian president in Indonesia's history and on Wednesday will speak to a rare joint sitting of Australia's two-house parliament.
But his government has this year chided Rudd for leaving mostly Sri Lankan asylum seekers stuck in Indonesian ports while their refugee claims are assessed.
Australia in turn is pushing for presidential clemency from Yudhoyono as a backstop for three Australian drug smugglers sentenced to death in Bali and currently lodging Indonesian court appeals.
Yudhoyono came to prominence in Australia in the aftermath of the 2002 Bali nightclub bombings, in which 88 Australians died. Yudhoyono was then senior minister of political and security affairs in president Megawati Soekarnoputri's cabinet.
His second visit to Australia is aimed at building investment and trade ties, while Rudd's centre-left government hopes to strengthen cooperation on security and people trafficking to avoid the issue clouding elections later this year.
Rudd is strongly tipped to win a second term, but conservatives have been making strong inroads into his once-stellar popularity in opinion surveys, helped in part by voter division over a softening of border protection rules.
Both Indonesia and Australia are members of the Group of 20 major economies and both countries in 2007 began talks on a free trade deal aimed in part at boosting Australian-dominated investment worth A$4.5 billion in 2008.
"When you're neighbours, when you are close together, there'll always be issues. The strength is how you deal with those issues," Australian Foreign Minister Stephen Smith said.
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