Free trade agreement to benefit Indonesia more than Japan

Zakki P. Hakim, The Jakarta Post, Jakarta

Indonesia and Japan have wrapped up a two-day preliminary bilateral Free Trade Agreement talks with results that include a simulation showing that the FTA scheme would benefit Indonesia far more than Japan, a senior official said on Wednesday.

"According to a simulation during the talks, Indonesia will in the end benefit more from the FTA compared to Japan," Ministry of Trade's Director General for International Cooperation Pos M. Hutabarat told reporters.

He declined to elaborate on how the FTA would affect both countries' exports or share any figures, saying the simulation was part of a preliminary study and accurate figures would be produced after the whole study concluded in March.

Pos said Indonesia would enjoy greater benefits because Japan was the country's biggest export market, while Indonesia played little role in Japan's international trade.

Last year, Japan was Indonesia's top export market with non- oil and gas commodity shipments reaching US$7.58 billion or 14 percent of Indonesia's total exports.

The meeting, formally called the Joint Study Group for Japan- Indonesia Economic Partnership Agreement, will be the first of three scheduled talks ahead of formal negotiations for a preferential trade deal.

The preliminary talks, which ended on Tuesday, will produce a full scale assessment on the FTA in mid-April to be submitted to relevant ministers in both countries, Pos said.

Afterward, "the ministers will determine whether or not an Indonesian-Japan FTA is needed. If it is deemed necessary, we will take the decision when formal negotiations will start," he explained.

The meeting explored import duties, labor regulations, immigration, taxation, trade facilitation and investment issues in both countries.