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.