RI seeks Japan's help in boosting competitiveness

RI seeks Japan's help in boosting competitiveness

Zakki P. Hakim, The Jakarta Post, Jakarta

The Indonesian government was still seeking Japan's help in
enhancing its own industrial competitiveness to optimize trade
relations, in a bid to eventually establish a bilateral free
trade agreement (FTA), a senior official said.

"We emphasized cooperation to run simultaneously with the
expected negotiations of trade and investment liberalization
agreement," said Halida Miljani, who heads an Indonesian
delegation at preparatory talks preceding a possible bilateral
FTA.

According to Halida, even if Japan opened its market 100
percent, Indonesia might not have an optimum benefit due to the
country's inability to meet Japanese tastes and standards.

"Therefore, we want to prioritize cooperation in establishing
an FTA with Japan," she told The Jakarta Post and Investor Daily
after returning from the talks in Tokyo.

The Tokyo talks were the third meeting, after the first and
the second in February and March in Jakarta and Bali,
respectively.

The preparatory talks, involving private sector
businesspeople, academics and government officials, as well as
representatives from non-government organizations, discussed
trade in industrial goods, farm products, service and investment.

Indonesia is urging Japan to facilitate personnel transfers,
remove tariffs on forestry and fish products and support small
businesses in this country.

"The group just identified concerns, actual negotiations would
not start before the two leaders agreed. But the negotiations
would be based on the concerns raised at the preparatory talks,"
said Halida, who is a former ambassador to the World Trade
Organization (WTO).

During the talks, aside from seeking a cooperation to enhance
local industrial competitiveness through Japan's assistance in
developing domestic supporting industries, Indonesia raised other
concerns in the agriculture and fisheries sectors.

In Agriculture, Indonesia asked Japan to recognize the country
as one that is free from hoof and mouth disease, so in the future
Indonesia may export meat and dairy products.

Indonesia also sought Japan's support in strengthening local
tuna fisheries management, as well as combating illegal fishing
in the country's Exclusive Economic Zone (EEZ).

Meanwhile, Japan requested that Indonesia work out investment
rules and eliminate tariffs on vehicles and auto parts.

Halida said that Japan sought explanations about Indonesia's
rules in investment in oil, natural gas and mining, as well as in
the power sector.

"They were asking about the annulment of Law No.20/2002 on
electricity," she said, referring to a controversial ruling
handed down by the Constitutional Court recently.

Furthermore, Japan wants greater liberalization in the
financial services industry, particularly non-banking financial
services, including insurance.

Also, responding to Indonesia's request, Japan was reviewing
rules to give a possibility for unskilled workers to be placed as
permanent employees in Japan, she said.

Expectations for an FTA between the two are high following
recommendations from a joint study, which concluded that an FTA
would further enhance bilateral economic ties.

The group expected the two country leaders to sign the FTA as
soon as possible, as it would be ideal to have the talks, in
conjunction with Japan's ongoing FTA negotiations with ASEAN,
said Halida, who is also a special assistant to Minister of Trade
Mari E. Pangestu.