RI, Japan's first EPA talks to kick off on Thursday

Zakki P. Hakim, The Jakarta Post, Jakarta

In response to an agreement inked between Japan and Indonesia during President Susilo Bambang Yudhoyono's visit to Tokyo in June, senior officials from the two Asian nations will initiate the first round of free trade talks here on Thursday.

Modalities needed for further and more substantive negotiations will be proposed at the two-day talks, part of scheduled rounds of negotiations aimed at establishing a bilateral Economic Partnership Agreement (EPA), Minister of Trade Mari Elka Pangestu said in a media statement on Wednesday.

The modalities will cover, among other things, the basic principles of negotiations, the structure and coverage of the negotiations, place and frequency of meetings, as well as setting up formations for expert groups.

Indonesia will identify the areas in which to negotiate after the modalities are agreed upon.

The areas range from trade of goods and services, customs procedures, rules of origin, investment policy, government procurement, movement of natural persons to intellectual property rights.

Soemadi DM Brotodiningrat, former Indonesian ambassador to Japan, will head the Indonesian delegation in Thursday's talks, while Japan will be led by Mitoji Yabunaka, deputy minister for Japanese foreign affairs in charge of EPA.

Before agreeing on the upcoming talks, both countries underwent a series of preparatory talks to identify concerns and benefits of a possible bilateral free trade agreement.

From Indonesia's perspective, aside from seeking cooperation to enhance local industrial competitiveness through Japan's assistance in developing supporting domestic industries, it also raised other concerns in the sectors of agriculture and fisheries.

In agriculture, Indonesia has asked Japan to recognize the country as being free of foot-and-mouth disease, so that in the future Indonesia may export meat and dairy products to the Asian giant.

Indonesia is also seeking Japan's support in strengthening its local tuna fisheries management, as well as combating illegal fishing in the country's exclusive economic zone.

On Japan's side, it has requested that Indonesia iron out investment regulations, and reduce or eliminate tariffs on vehicles and auto parts.

For instance, Japan wants explanations about Indonesia's rules in investment in the oil, natural gas and mining sector, as well as in the power sector, in regards to the recent annulment of Law No.20/2002 on electricity.

Japan is also seeking deeper liberalization in financial services, with interest in nonbanking financial services including insurance.

Also, in response to Indonesia's requests, Japan is reviewing rules to possibly allow unskilled Indonesian workers, particularly nurses and care givers, to secure full-time employment in Japan.