Today, the Japan-Indonesia Economic Partnership Agreement (JIEPA) entered into force. The agreement was signed last August in Jakarta under the strong leadership of President Susilo Bambang Yudhoyono and then Japanese Prime Minister Shinzo Abe. This agreement, which comes in the same year Japan and Indonesia celebrate 50 years of diplomatic ties, underscores the long-standing relationship and trust our two countries have enjoyed.

We are very pleased to conclude such an EPA with our strategic partner, Indonesia, but more than this, we are honored to be a partner country in Indonesia's first bilateral EPA.

At its core, the JIEPA is aimed at strengthening economic ties between Japan and Indonesia, through further liberalization of trade and investment. The agreement is also expected to add momentum to East Asia's economic integration and contribute to the region's prosperity as a whole.

The JIEPA has many benefits for both countries, and we would like to enumerate some of these here.

The first is in trade: Under the agreement, tariff-free trade between Japan and Indonesia will reach 92 percent (by value). This includes the almost complete elimination of tariffs on industrial products from Indonesia, effective immediately, as well as on other Indonesian exports, such as tropical fruits, forest products and shrimp. It is expected that these tariff reductions will lead to increased trade between the two countries.

In addition to increased trade volume, the agreement will also pave the way for more strategic business partnerships between Japanese and Indonesian firms. This can lead to a wider range of exported goods to Japan, including more high value-added products.

Indonesia's textile industry is one area that stands to gain a competitive edge through tariff elimination under the JIEPA. It will enable Indonesian textile makers to export to Japan a wider variety of goods, from textiles to more higher value items like clothing and apparel.

Indonesia's auto industry is another area expected to gain through the JIEPA. Firms in Indonesia can import parts and materials from Japan at a lower cost through the agreement. This could boost the competitiveness of Indonesia as an automobile production base, and thereby enable auto manufacturers to target other markets in ASEAN and the Middle East.

The second major benefit of the agreement will be the enhanced movement of persons between the two countries. The JIEPA is Japan's first bilateral EPA under which the government supports the entry of foreign workers into Japan.

Under the JIEPA, a special program is being set up that allows Indonesian nurses and care workers to reside in Japan to acquire the knowledge and skills necessary to pass Japan's national nursing and care workers exams. Those who pass the exams will be able to continue working in their profession in Japan. Over the next two years, up to 400 nurses and 600 care workers will be accepted into the program.

The third benefit brought by the JIEPA will be enhanced cooperation between Japan and Indonesia. Under the agreement, numerous projects and activities will be jointly carried out to help address challenges facing Indonesia.

One of the focuses will be on further development of Indonesia's supporting industries, which is urgently required for the country to boost its competitiveness. Thailand, for example, has well-developed auto supporting industries, allowing firms there to procure most parts from within the country, whereas in Indonesia we hear that firms have to source a considerable amount of parts and components from abroad.

To help correct this, under the JIEPA, Japan will send experts in mold and die (a core part of supporting industries) to Indonesia to share know-how and technology and to train local workers. Exchanges of personnel between Japanese and Indonesian firms in this area will be another feature of the project.

And to support Indonesia's rapidly growing auto industry, the Japan External Trade Organization (JETRO) and both countries' governments will work together to develop Indonesia's human resources (targeting parts makers), through lectures and guidance offered by Japanese experts on improvement of productivity and quality management.

Such cooperative projects will not only benefit local companies, but also make the country more appealing in the eyes of international firms as an investment destination. Moreover, Indonesia will benefit from added jobs and expansion of smaller businesses in regions across the country.

The Indonesian government is working to develop non-oil and gas exports, such as through Trade Minister Mari Elka Pangestu's "creative industries" concept, and Industry Minister Fahmi Idris' efforts to foster SME clusters. We would like to do our part to support such efforts.

One way we are doing this is through the "One Village One Product" approach, in which JETRO sends experts to Indonesia to work with local handicraft producers in identifying/developing products that would appeal to Japanese consumers. Experts have already been working with producers in Yogyakarta, and their efforts are beginning to bear fruit. We hope that such joint efforts will spread to other regions under the JIEPA framework.

For every region, company and citizen of Indonesia to get maximum benefit from the JIEPA, efforts to spread the word about the agreement -- as well as ways to utilize it -- are required. Toward this, JETRO will set up Business Support Desks to provide trade and investment information and put in place advisers who can give advice on the EPA's utilization. JETRO will also work with the Indonesian Chamber of Commerce and Industry (KADIN) to promote the EPA in regional areas, reaching out to local companies, in particular small and medium-size ones.

Today, the East Asian economy, with its rapid pace of economic development and deepening integration, is one of the most dynamic in the world. And the JIEPA will lay a foundation for Japan and Indonesia to be stronger partners in tapping into this growing regional dynamism and also set a course for future sustainable growth. It is our sincere hope that the JIEPA will be fully utilized by the businesses and individuals of both countries, and that both countries reap maximum benefit from this historic agreement.

Akira Amari is the Japanese minister of economy, trade and industry. Yasuo Hayashi is chairman and CEO of the Japan External Trade Organization.

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