Indonesian Trade Minister Rachmat Gobel said that the continuation of economic cooperation between Indonesia and Japan, as set out in the Indonesia-Japan Economic Partnership Agreement (IJEPA), is to be reviewed soon by both countries. Gobel met Japan’s Prime Minister Shinzo Abe and Japan’s Minister of Economy, Trade and Industry Yoichi Miyazawa in Tokyo today. In the IJEPA it was mentioned that cooperation between both countries can be reviewed after the bilateral free-trade agreement had been in effect for five years.
The Indonesia-Japan Economic Partnership Agreement (IJEPA), which had come into effect on 1 July 2008, was Indonesia’s first bilateral free-trade agreement. The agreement was made in an effort to enhance the cross-border flow of goods and people as well as investment between both countries. Such trade liberalization, including the scrapping of import duties for most export products, was designed to benefit both countries (Indonesia and Japan being important trading partners). The agreement also provided room to smoothen Japan’s foreign direct investment (FDI) in Indonesia (Japan has been one of the largest investors in Indonesia). Lastly, the IJEPA was also intended as the stepping stone to broader regional cooperation with ASEAN+ agreements, APEC, and the WTO Doha Agenda.
Trade Minister Gobel stated that the review may be conducted this year and hopes that the partnership can contribute to the Indonesian government’s ambitious target to raise economic expansion to 7 percent (y/y) by the end of President Joko Widodo’s first term in 2019 as the IJEPA was designed to boost Indonesian exports to Japan and to facilitate Japanese FDI into Southeast Asia’s largest economy.
• Government Presentation Indonesia-Japan Economic Partnership Agreement (30 November 2007)