Indonesia and Japan agree to sign FTA
Antara News, Indonesia
Indonesia and Japan agree to sign FTA
6 July 2007
Cairns, Australia (ANTARA News) - Trade ministers from Japan and Indonesia have agreed the two nations will sign a bilateral free trade agreement when Japanese Prime Minister Shinzo Abe visits Indonesia in August, a senior Japanese official said Friday.
The FTA would eliminate tariffs on about 92 percent of bilateral trade by value. It features an energy security partnership between the two countries and immediate removal of Indonesian tariffs on high-grade Japanese steel products.
Japanese Economy, Trade and Industry Minister Akira Amari and Indonesian Trade Minister Mari Pangestu made the agreement during their talks Thursday in Cairns, Australia, on the sidelines of a two-day trade ministerial meeting of the Asia-Pacific Economic Cooperation forum, the official said told Kyodo.
Abe is scheduled to visit Indonesia from Aug. 19 to 21 on the first leg of a three-nation Asian tour that will also take him to India and Malaysia. He will hold talks with Indonesian President Susilo Bambang Yudhoyono during the visit to the country.
When reaching a broad accord on the FTA last November, the two countries agreed that Indonesia will hold prior consultations with Japan about restricting oil and gas exports in the event of a surge in domestic demand.
They also agreed that Indonesia will fully implement existing energy supply contracts between the two countries even when export restrictions are invoked.
In return, Japan will increase technical assistance to Indonesia in areas such as coal-to-liquid technology, energy-saving measures and the compilation of long-term supply-demand balance for crude oil, coal and natural gas.
Indonesia is the largest supplier of natural gas to Japan. Jakarta is also the third- and sixth-largest exporter of coal and crude oil, respectively, to Japan.
On trade in goods and services, Indonesia will erase tariffs on large Japanese automobiles by 2012 and on small and midsize vehicles by 2016. It will do away with tariffs on auto parts by 2012.
Indonesia will also eliminate tariffs on Japanese electric and electronic products by 2010.
Taking the measures into account, Indonesia will eventually remove tariffs on some 96 percent of Japanese exports in value terms.
Japan, for its part, will immediately remove tariffs on forest products, shrimp and almost all industrial products from Indonesia.
Japan will also eliminate tariffs on up to 1,000 tons of bananas per year in five years.
With the steps, Japan will erase tariffs on about 93 percent of Indonesian exports.
Separately, Japan will accept Indonesian nurses and nursing-care specialists to work in its territory provided they meet Japanese qualification standards.
Japan will positively consider undertaking training of Indonesian tourism industry workers including hotel employees.
But the two nations have yet to discuss details of the plan, such as the number of such workers Japan can host.
