Indonesia, Japan to start preliminary FTA talks

The Jakarta Post, Jakarta

Indonesia and Japan are scheduled to hold a two-day meeting to discuss a possible bilateral trade agreement on Monday. The meeting will serve as the initial move before starting a formal rounds of negotiations, a senior official at the Ministry of Trade says.

"We will first explore the rules regarding import duties. We will cut our import duties and so will they," the ministry's director general for international cooperation Pos M. Hutabarat told reporters over the weekend. Cutting or removing import duties will expand market access into destination countries and eventually should boost trade between the two countries.

The meeting will also explore the rules on labor and immigration issues, taxation, trade facilitation and investment.

Pos said he expected the Japanese delegation to question immigration rules that allowed expatriates to work only for six months, forcing them to visit Singapore to renew their working visas.

Indonesia, in the meantime, would also ask for a wider access for skilled migrant workers such as drivers and nurses to travel and work in Japan, he said.

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

The second will be held in Japan in late February, while the third will be in Indonesia in late March.

The meeting is expected to produce an assessment of whether or not a free trade agreement between the two countries is needed, Pos said, and if it turned out to be necessary, to decide when negotiations will start.

Although Pos could not say when would a Japan-Indonesia FTA would be established, he expected negotiations to be wrapped up in eight months based on the Philippines experience.

Neighboring countries have moved faster than Indonesia in pursuing FTAs with Japan. Singapore and the Philippines have already finished their negotiations, but only the city-state has actually signed an agreement.

Negotiations with Thailand and Malaysia have yet to be concluded and are currently stalled on the issues of agriculture and investment respectively, Pos said.

The joint study group will involve stakeholders from the private sector, academics, government institutions such as the Ministry of Agriculture, Ministry of Foreign Affairs, Ministry of Maritime Affairs and Fisheries, and Ministry of Forestry.

During Monday's meeting, Pos will be accompanied by his expert advisor, Halida Miljani, who is a former Indonesian Ambassador to the World Trade Organization.

The meeting is also a follow-up to a previous agreement entered into by Japanese Minister for the Economy, Trade and Industry Shoichi Nakagawa and Indonesian Minister for Trade Mari E. Pangestu in December, as well as a January deal between Japanese Minister of Foreign Affairs Nobutaka Machimura and Vice President Jusuf Kalla.