Abe's visit aimed at boosting ties between Indonesia and Japan

The Jakarta Post ,  Jakarta   |  Wed, 08/15/2007 1:18 PM

Abdul Khalik, The Jakarta Post, Jakarta

Japanese Prime Minister Shinzo Abe and President Susilo Bambang Yudhoyono are set to sign a much-awaited economic partnership agreement (EPA) and launch several new projects when Abe visits Indonesia next week.

The Japanese Embassy in Jakarta said Abe, who will be in Indonesia from Sunday to Tuesday and will be accompanied by more than 150 Japanese businesspeople, will discuss ways to enhance strategic bilateral partnerships in the political, economic and cultural fields with Yudhoyono.

""They will also tackle international issues, such as developments on the Korean Peninsula, the United Nations reform program and ways to enhance security in the Malacca Strait,"" the Japanese embassy's deputy chief of mission Satoru Satoh told reporters Tuesday.

""Aside from meeting with President Yudhoyono, Prime Minister Abe will deliver a speech in front of Indonesian businesspeople on Japan's global policy,"" he said.

On economic relations, the signing of the EPA is expected to boost two-way trade between the countries and Japanese investment in Indonesia, as both sides will promote cooperation for the purpose of facilitating trade. Such cooperation will include the simplification and harmonization of customs procedures.

Satoh said the EPA would cut tariffs to zero on over 90 percent of products and services being traded by Indonesia directly after the signing of the agreement.

""So the EPA will make an immediate impact on Indonesia-Japan trade relations as only tariffs on several sensitive products such as agricultural goods (will remain) that will be gradually reduced within 10 years. We expect that bilateral relations will be significantly increased after the signing,"" he said.

Japan is Indonesia's largest trading partner. Two-way trade amounted to US$27.2 billion in 2006, with an $16.2 billion surplus in Indonesia's favor.

On the investment front, the EPA will provide a framework for the further expansion and facilitation of cross-border investment between the two countries through a commitment to national treatment, most-favored-nation status, dispute settlements between state and investors and enhanced protection of investors and investments.

Japan is also among Indonesia's largest investors, with approved investment plans amounting to $1.68 billion in 2005. With the number of its companies operating in Indonesia numbering over 1,000, Japan's accumulative investment in Indonesia reached $39.4 billion from 1967 to 2006 and created over 200,000 jobs.

Satoh said the EPA was expected to enable Japan to double its investments in the country.

""During his visit, Prime Minister Abe will witness the signing of several new projects in the energy sector,"" he said.

The EPA will also outline a framework for easier travel between the countries, including for short-term business visits and service providers.

""In the same context, both sides will also establish a scheme of acceptance for nurses and care workers,"" Satoh said.

When asked whether Abe will still be able to fulfill his commitments during his visit to Indonesia after his party's recent loss in the upper house elections, Satoh said the prime minister's weakened position did not affect the international commitments he has made. The LDP, Abe's party, still rules the lower house, a much more influential chamber.

Aside from briefing Yudhoyono on Korean Peninsula developments and Japan's place in East Asian politics, Abe is also likely to ask for Indonesia's support regarding the United Nations reform program and Malacca Strait security efforts.

Japan, sporting the world's second largest economy, has aimed at achieving a more prominent international status by insisting on UN reform that allows it to become a permanent member of the UN Security Council.

Security in the Malacca Strait is also an important issue for Japan, as many of its needs, including oil and gas from the Middle East, pass through the area.

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