Don't close Indon trade office: Ex MP

Former foreign affairs minister Stephen Smith has labelled as "inexplicable" and "nonsense" the mooted plans by the Barnett Government to close its Indonesian trade office.

Mr Smith said today that Indonesia's economy was forecast to become one of the world's five biggest within the next 20 years and shutting WA's trade office there would seriously disadvantage local businesses.

The former federal Perth MP he also admitted for the first time that he thought the Gillard government's controversial decision to ban live animal exports to Indonesia in 2011 had been a mistake.

The comments came as Mr Smith addressed a luncheon hosted by the Centre for Economic Development of Australia to discuss Australia-Indonesia business relations under the new Jakarta administration of Joko Widodo.

According to Mr Smith, it would make more sense for the State Government to close WA's trade office in London than its one in Indonesia.

He said there were very few WA businesses that would "need their hand held while walking down The Strand", but there were overwhelming reasons why a trade office was needed in Indonesia.

Chief among these was the increased complexity of doing business in the archipelago, while the Indonesians also place a lot of importance in personal relations.

"If the State Government of Western Australia is not in the face of Indonesia saying 'we're an attractive place to do business and ultimately an attractive place to invest' who else is saying it for them," Mr Smith said.

"It is a nonsense - it's a really detrimental decision and it should be overturned and it should be overturned quickly."

The comments add to pressure on Colin Barnett to reverse the decision, which has drawn criticism from within the Premier's own ranks as well as the business sector.

However, Mr Barnett this afternoon insisted that no decision had been made to close the office.

"We haven't closed the Indonesian Trade Office," Mr Barnett said.

"We are examining options for how it will operate in the future.

"Western Australian will maintain a presence in Jakarta."

They came as Mr Smith conceded the decision by the former federal Labor government to ban live animal exports in 2011 had been wrong.

Mr Smith said although the decision - which was prompted by a television report exposing animal mistreatment at Indonesian abattoirs - may have been the "shock" the system needed he did not agree with it.