RI official says Japan set to ratify economic deal
Jakarta Post | 15 November 2007
RI official says Japan set to ratify economic deal
Andi Haswidi, The Jakarta Post, Jakarta
The Japanese parliament is expected to soon start the ratification process for the recently signed economic partnership agreement (EPA) with Indonesia, an official says.
"The Japanese parliament finally agreed today to resume naval support for the military operation led by the U.S. in Afghanistan. This means that the ratification process for the EPA can start soon," Indonesia’s chief EPA negotiator, Soemadi Brotodiningrat, told The Jakarta Post on Tuesday.
The Japanese parliament had also previously been preoccupied by the change in leadership from prime minister Shinzo Abe, who signed the EPA with President Susilo Bambang Yudhoyono on Aug. 20, to Yasuo Fukuda, after Abe’s resignation in September.
Soemadi, who is a former ambassador to Japan, said that with the naval support issue concluded, all processes leading up to the implementation of the EPA could be concluded by early next year at the latest, with the actual coming into effect of the agreement scheduled for 30 days after its ratification by both countries.
As for Indonesia, according to Soemadi, the agreement did not have to go through the House of Representatives.
Instead, the President would issue a presidential decree to bring the EPA into effect after a joint committee had been established to oversee its implementation. The committee would group together officials from the relevant government institutions and the private sector.
The EPA is a comprehensive economic agreement that involves the cutting or elimination of various import tariffs, increased Japanese investment in Indonesia, and capacity-building programs for Indonesian industry and manpower.
Trade Minister Mari Elka Pangestu has said that the EPA will sustain Japan’s existing investment in the country and attract new investment in the future, with an estimated $65 billion in new ventures being in the offing up until 2010.
Meanwhile, Japan’s manufacturing industrial development centers (MIDEC) would run capacity-building programs in 10 industrial fields, namely, the automotive, electronics, construction, machinery, public facilities, promotion, food and beverages, textiles, SME, steel and oleo-chemicals, and petrochemical sectors.
On the trade side, Indonesia would cut import tariffs on about 93 percent of the existing 11,163 tariff items. In return, Japan would eliminate more than 90 percent of its existing 9,275 tariff items, including tariffs on textiles and agricultural products.
According to the Industry Ministry, the automotive, electronics and construction sectors will receive an immediate boost from the tariff cuts, as many of the Japanese investment commitments are in these sectors.
A simulation of the EPA’s benefits shows that Indonesia’s exports, which hit the $100 billion level last year and are expected to grow this year by 14 percent, could grow by another 4.68 percent per year on the back of rising exports to Japan.
