Abe, Yudhoyono sign FTA, agree to tackle climate change

Kyodo News | Aug. 20 2007

Abe, Yudhoyono sign FTA, agree to tackle climate change

Japanese Prime Minister Shinzo Abe and Indonesian President Susilo Bambang Yudhoyono on Monday signed a bilateral free trade agreement and confirmed a shared commitment to tackling global warming beyond 2012.

The FTA — the sixth for Japan with a Southeast Asian nation after Singapore, Malaysia, the Philippines, Thailand and Brunei — includes provisions for ensuring energy security as well as the removal of tariffs on about 92 percent of bilateral trade values.

The agreement, officially named the Japan-Indonesia Economic Partnership Agreement, is expected to take effect at an early stage next year, Japanese officials said.

The energy-security provisions call for a new bilateral consultation mechanism with an eye on Indonesia’s possible supply cut to meet growing domestic demand after the 2010-2011 expirations of long-term contracts for liquefied natural gas supply to Japan.

Indonesia is the largest LNG supplier to Japan. The contracts account for about 20 percent of the two countries’ overall LNG trade.

As the provisions do not necessarily assure Japan of continued energy supply on the current scale, Abe emphasized the significance of a stable LNG supply from Indonesia during his talks with Yudhoyono, according to a joint statement signed after their talks.

Yudhoyono said at a joint press conference which followed that he expects further Japanese investment will help Jakarta attain both the goals of meeting its domestic energy demand and maintaining cooperation with Japan over LNG.

Abe and Yudhoyono also expressed their resolve to take part in a new ’’effective’’ antiglobal warming framework to be formulated for a period after the current Kyoto Protocol expires in 2012, referring to a key international meeting to be held in December in Bali.

Yudhoyono said he welcomes and appreciates Abe’s so-called ’’Cool Earth 50’’ initiative aimed at halving global greenhouse gas emissions by 2050 from current levels, and that he expects to use it as an ’’umbrella’’ for bilateral cooperation on the issue.

The two leaders also said they reaffirmed the importance of sea lane security for energy trade, and discussed North Korea and other issues as well as bilateral friendship.

Abe said they agreed on the need for North Korea’s abductions of Japanese citizens to be solved quickly and that Yudhoyono said his country, which has diplomatic relations with Pyongyang, is willing to contribute to that end.

Abe also said he offered 1.7 billion yen in new grants to help Jakarta fight avian influenza and that Tokyo is also considering aid to help consolidate Indonesia’s peace-building efforts in Aceh.

Under the bilateral FTA pact, about 90 percent of Japanese goods being exported to Indonesia would become tariff-free in terms of value, up from 34 percent, and approximately 93 percent of Indonesian goods bound for Japan, up from 71 percent.

Jakarta will also remove tariffs on Japanese steel products for specific use in such sectors as auto production and energy, bringing the total proportion of tax-free Japanese exports to Indonesia to about 96 percent.

Tokyo will allow duty-free imports of Indonesian forest products and shrimp, expand tariff quotas on bananas and pineapples, and allow Indonesian nurses and nursing-care specialists to work in Japan, but exempt rice — a politically sensitive item for Japan — from goods covered in the agreement.

Indonesia is Japan’s 11th-largest trading partner, while Japan is the leading partner for Indonesia.

Later Monday, Abe will deliver a speech on Japan’s future policy toward the Association of Southeast Asian Nations — the first such speech by a Japanese prime minister since an address by his predecessor Junichiro Koizumi in 2002 in Singapore.

Before an audience of government, parliamentary, business and academic leaders here, Abe will speak about his ideas for ’’developing’’ the 1977 doctrine which then Prime Minister Takeo Fukuda adopted for Japan’s relations with Southeast Asia, the Japanese officials said.

The doctrine calls for relations between Japan and Southeast Asia to be built on an equal footing without the former becoming a military power.

source: Kyodo