RI, Japan to meet in Tokyo this month to finalize EPA deal

Andi Haswidi, The Jakarta Post - 2007-02-09 11:20

Jakarta, February 9, 2007 - Negotiators representing Indonesia and Japan will hold a meeting in Tokyo later this month to finalize an economic partnership agreement (EPA) between the two countries, says a senior Indonesian trade official.

"There will be a meeting of expert groups from both countries in Tokyo this month to finalize the proposed cooperation arrangements in the energy and mineral sector, one of the top-priority chapters in the partnership agreement," Indonesia's chief negotiator Sumadi Brotodiningrat told The Jakarta Post by phone Thursday.

Since President Susilo Bambang Yudhoyono and Japanese Prime Minister Shin-zo Abe agreed on key elements of the EPA, nine chapters have been finalized so far, leaving chapters on energy and mineral resources, trade in goods, rule of origin and technical cooperation still on the negotiating table.

"In terms of quantity, I can say that- we have finished about 90 percent of the content. But regarding quality, the* remaining 10 percent is of much greater significance," Sumadi said.

The Energy and Mineral Resources Ministry's planning and bilateral cooperation director, Thamrin Sihite, who is also a member of the expert group, said that the next meeting would discuss requests from Japan, such as for Indonesia to report the adoption of all policies in the energy and mineral resources field.

"They want to have prior notice of every policy concerning energy and mineral resources. We cannot accept this. We can only offer the information in due course," he said.

Initially, Japan wanted to include a clause in the chapter stating that Indonesia would ensure a stable supply of energy to Japan.

Japan is dependent on Indonesia for 27.6 percent of its liquefied natural gas (LNG) and 3.5 percent of its crude oil imports.

The Indonesian government also declined this request, saying it was in no position to guarantee stable energy supplies to any nation, except those that already had contracts.

Instead, Indonesia agreed that the two nations should engage in close coordination to promote and facilitate investment in the energy sector, and to contribute to enhancing the security of energy and mineral-resources supplies for both countries through capacity-building projects and developing alternative sources of energy.

Another issue that will be discussed during the upcoming meeting is Japan's request for a clause to be included in the EPA annex that would ensure there would be no geographical restrictions on its energy investment in Indonesia.

"We will grant them this as long as it doesn't go against our laws. And we will also request the same treatment, for us to be able to invest anywhere in Japan," he said.

Upon the completion of the EPA negotiations, which is scheduled for March 31, Japan will drop more than 90 percent of its tariffs on Indonesian products, while Indonesia will remove around 35 percent of its tariffs on goods imported from Japan immediately, and the rest over a period of between three and 15 years.