Indonesia in high hopes from free trade deal with Japan

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    JAKARTA, Aug. 22 (Xinhua) -- Indonesia will tap many benefits from the newly-signed free trade pact with Japan, Indonesian Trade Minister Mari Elka Pengestu said Wednesday.
    "Export market to Japan will increase for certain, because tariffs on many commodities will be cut to zero," she said in an interview with Metro TV.
    Indonesian President Susilo Bambang Yudhoyono and visiting Japanese Prime Minister Shinzo Abe signed the Economic Partnership Agreement (EPA) on Monday for what Mari said was Indonesia's first bilateral free trade pact.
    In addition to bigger market access, Indonesia is allowed to send semi-professional workers to Japan under the EPA, she said.
    Indonesia also will benefit from Japan's technical assistance needed to Indonesian goods suitable for Japanese markets, said Mari.
    Under the EPA, Indonesia will trim tariffs of about 93 percent of its 11,163 products and eliminate 58 percent of them, while Japan will cut and eliminate more than 90 percent tariffs on 9,275 products.
    The deal also encourages both countries to strengthen cooperation in the energy sector.
    "In the energy sector, Japan has always bought from us but never invested. We need them to invest, to ensure security of supply," Mari said.
    Indonesia is the largest supplier of liquefied natural gas (LNG)for Japan but Jakarta has warned it cannot guarantee supplies after 2010 because of growing domestic demand and lack of investment in gas industry.
    With the EPA signing, Indonesia hopes to become production base of many Japanese major industries to supply regional and global markets, she said.
    "We hope to reclaim the status as Japan's third biggest trade partner prior to the (1997) crisis, as our ranking has dropped to eighth or ninth at present."
    When asked if the government is looking for bilateral free trade agreement with other countries, Mari said Australia is already in sight.
    "Leaders from both countries have agreed on a joint feasibility study on free trade agreement. After the study is concluded within six months, we will continue to the negotiating phase," said Mari.
    With other Asian nations like China and South Korea, Indonesia has reached free trade deals under the framework of the Association of Southeast Asian Nations (ASEAN), she said.
               
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