Susilo and Koizumi set to officiate FTA talks

Susilo and Koizumi set to officiate FTA talks

Zakki P. Hakim, The Jakarta Post, Jakarta

President Susilo Bambang Yudhoyono and Japan Prime Minister
Junichiro Koizumi are set to officially begin negotiations on a
bilateral Economic Partnership Agreement (EPA) during Susilo's
visit to Japan next week, a minister said.

Minister of Trade Mari E. Pangestu said the negotiations would
include not only the liberalization of trade in goods and
services, but would also seek cooperation to enhance Indonesia's
industrial competitiveness and Japan's request for Indonesia to
work on its investment regulations.

"The negotiations are expected to take one to two years," Mari
told a press conference on Monday. Susilo will visit Japan for
the first time as president from May 31 to June 2, where he will
meet Koizumi and Emperor Akihito. Prior to the Japan visit,
Susilo will meet U.S. President George W. Bush in Washington,
from May 25 to May 26.

The EPA is a widened free trade agreement (FTA).

The Tokyo negotiations are a follow-up to preparatory talks
held in Jakarta, Bali and Tokyo since early this year. The
preparatory talks involved the private sector, academics and
government officials, as well as representatives from non-
government organizations (NGOs) to discuss the challenges and
opportunities of bilateral economic ties.

Earlier, the minister's special assistant Halida Miljani said
that Indonesia was seeking cooperation to boost the country's
industrial competitiveness in order to take maximum benefit from
a possible free trade agreement.

"Even if Japan opened its market 100 percent, Indonesia might
not take maximum benefit due to the country's inability to meet
Japanese tastes and standards," said Halida, who heads an
Indonesian delegation in the preparatory talks preceding the
negotiations.

During the talks, aside from seeking cooperation to enhance
local industrial competitiveness through Japanese assistance in
developing domestic supporting industries, Indonesia raised other
concerns in the agricultural and fishery sector.

Indonesia asked Japan to recognize the country as free from
foot and mouth disease (FMD), to allow Indonesia to export meat
and dairy products. It also sought Japan's support in
strengthening local tuna fisheries management, as well as
combating illegal fishing in the country's waters.

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

Halida said that Japan sought an explanation about Indonesia's
rules in investment in oil, natural gas and mining, as well as in
the power sector. Japan wants also 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 allow Indonesian unskilled workers to be placed as
permanent employees in Japan, she said.

She also said that it would be ideal to start negotiations as
soon as possible because it would be parallel to the ongoing FTA
talks between Japan and Association of Southeast Asian Nations
(ASEAN).