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Susilo and Koizumi set to officiate FTA talks

May 25, 2005

Susilo and Koizumi set to officiate FTA talks

Zakki P. Hakim, The Jakarta Post, Jakarta

President Susilo Bambang Yudhoyono and Japan Prime Minister Junichiro Koizumi are set to officially begin negotiations on a bilateral Economic Partnership Agreement (EPA) during Susilo’s visit to Japan next week, a minister said.

Minister of Trade Mari E. Pangestu said the negotiations would include not only the liberalization of trade in goods and services, but would also seek cooperation to enhance Indonesia’s industrial competitiveness and Japan’s request for Indonesia to work on its investment regulations.

"The negotiations are expected to take one to two years," Mari told a press conference on Monday. Susilo will visit Japan for the first time as president from May 31 to June 2, where he will meet Koizumi and Emperor Akihito. Prior to the Japan visit, Susilo will meet U.S. President George W. Bush in Washington, from May 25 to May 26.

The EPA is a widened free trade agreement (FTA).

The Tokyo negotiations are a follow-up to preparatory talks held in Jakarta, Bali and Tokyo since early this year. The preparatory talks involved the private sector, academics and government officials, as well as representatives from non-government organizations (NGOs) to discuss the challenges and opportunities of bilateral economic ties.

Earlier, the minister’s special assistant Halida Miljani said that Indonesia was seeking cooperation to boost the country’s industrial competitiveness in order to take maximum benefit from a possible free trade agreement.

"Even if Japan opened its market 100 percent, Indonesia might not take maximum benefit due to the country’s inability to meet Japanese tastes and standards," said Halida, who heads an Indonesian delegation in the preparatory talks preceding the negotiations.

During the talks, aside from seeking cooperation to enhance local industrial competitiveness through Japanese assistance in developing domestic supporting industries, Indonesia raised other concerns in the agricultural and fishery sector.

Indonesia asked Japan to recognize the country as free from foot and mouth disease (FMD), to allow Indonesia to export meat and dairy products. It also sought Japan’s support in strengthening local tuna fisheries management, as well as combating illegal fishing in the country’s waters.

Meanwhile, Japan requested that Indonesia work out investment rules and eliminate tariffs on vehicles and auto parts.

Halida said that Japan sought an explanation about Indonesia’s rules in investment in oil, natural gas and mining, as well as in the power sector. Japan wants also greater liberalization in the financial services industry, particularly non-banking financial services, including insurance.

Also, responding to Indonesia’s request, Japan was reviewing rules to allow Indonesian unskilled workers to be placed as permanent employees in Japan, she said.

She also said that it would be ideal to start negotiations as soon as possible because it would be parallel to the ongoing FTA talks between Japan and Association of Southeast Asian Nations (ASEAN).

 source: Jakarta Post