Govt told to broach FTA with Japan<\/p>\n
Adianto P. Simamora, The Jakarta Post, Jakarta<\/p>\n
Economic experts say that the Indonesian government must take
\nadvantage of Japanese Prime Minister Junichiro Koizumi's visit
\nhere to pursue the establishment of a bilateral free trade
\nagreement (FTA) with the world's second largest economy.<\/p>\n
\"This is the right moment for the government to discuss a
\nbilateral free trade agreement with Japan,\" Sri Adiningsih, a
\nprofessor at Gadjah Mada University, told The Jakarta Post on
\nSaturday.<\/p>\n
Her comments came after two of the six founding members of the
\nAssociation of Southeast Asian Nations (ASEAN) -- Singapore and
\nThailand -- agreed to each build up a bilateral FTA with Japan.<\/p>\n
In October, Japan and Singapore completed negotiations to
\nlaunch their bilateral free trade accord.<\/p>\n
On Friday, Koizumi, on his five-nation tour in the region,
\nalso said that he agreed in principle with his Thai counterpart,
\nThaksin Shinawatra, to set up an FTA between their countries
\nwithin the year.<\/p>\n
Koizumi arrive in Jakarta on Saturday. Japan is Indonesia's
\nsecond export destination after the United States.<\/p>\n
\"We will suffer many losses if the government fails to take
\nthis opportunity to discuss the FTA,\" Sri said. \"The FTA scheme
\nis not a bad thing, because each ASEAN country must also
\nprioritize its own national interests.\"<\/p>\n
She added that Thailand would use the bilateral agreement to
\nincrease agricultural exports to Japan with low import tariffs.<\/p>\n
Japanese farmers are currently still protected by their
\ngovernment from cheap agricultural imports.<\/p>\n
\"It will also be easier to invite more investment from Japan
\n(in Indonesia) if there is a bilateral FTA,\" Sri said.<\/p>\n
Meanwhile, Soy Pardede, a senior official at the Indonesian
\nChamber of Commerce and Industry (Kadin), voiced fear that the
\nestablishment of a FTA with Japan would threaten the ASEAN Free
\nTrade Area, popularly known as AFTA.<\/p>\n
\"In terms of ASEAN context, this is not the right moment to
\nset up FTA with Japan,\" Soy said.<\/p>\n
But he admitted that the government might be forced to discuss
\nthe possibility of setting up FTA with Japan so as not to be left
\nbehind Singapore and Thailand.<\/p>\n
Leaders from the six founding ASEAN nations agreed to set up
\nAFTA in 1993, with the implementation of the free trade scheme
\ninitially scheduled for 2008 but later moved up to 2002.<\/p>\n
Under the AFTA scheme, almost all products traded in the six
\nfounding ASEAN countries members now have import tariffs of
\nbetween zero percent and 5 percent<\/p>\n
Analysts have said that Koizumi's trips to five ASEAN nations
\nwould be used to boost Japan's profile in the region to counter
\nChina's intensified dialog with ASEAN members.<\/p>",
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"sponsor": "Okusi Associates",
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