Indonesia’s Foreign Affairs Minister Retno Marsudi dan Japan’s Foreign Affairs Minister Taro Kono.

JAKARTA (TheInsiderStories)—Indonesia and Japan agreed to explore the possibility of developing Indonesia as a manufacturing base for Japanese companies.

Indonesia’s Foreign Affairs Minister Retno Marsudi dan Japan’s Foreign Affairs Minister Taro Kono has held the 6th Strategic Dialogue Indonesia-Japan meeting. The meeting took place at Gedung Pancasila Ministry of Foreign Affairs, Jakarta, on Monday (25/6). The visit coincides with the 60th anniversary of Indonesia-Japan diplomatic relations.

The meeting is aimed to enhance bilateral cooperation in politics, security, economy, trade, and investment, as well as the exploration of opportunities for strategic cooperation between the two countries.

One of key discussion was an agreement by both foreign ministers to explore the possibility of making Indonesia a production based for manufacturing products. Japan is the second biggest investor in Indonesia with a total investment of US$5 billion in 2017 and US$1.4 billion in the first quarter of 2018.

The value of trade between the two countries grew 13.54 per cent to US$33.03 billion in 2017 (year on year/yoy). Indonesia recorded US$655.9 million surplus in the trade with Japan in the first quarter of 2018. However, the surplus mostly contributed by oil and gas exports. Indonesia recorded deficit in non-oil and gas trade with Japan of US$250.9 million.

Furthermore, the two countries also agreed to cooperate in infrastructure development and agreed to encourage cooperation among developing countries cooperation to support Palestine and African countries development.

The two Foreign Ministers will travel to Bangkok, Thailand on June 26 to attend the Cooperation among East Asian Countries for Palestinian Development (CEAPAD) Ministerial Forum in order to discuss the assistant for Palestine.

In the meeting, the two foreign affairs ministers witnessed the signing of the Exchange Notes on integrated marine and fisheries center and fish market.

Furthermore, Indonesia also pushed Japan to finish the general review of Economic Partnership Agreement (IJEPA). IJEPA was signed in Jakarta on August 20, 2007, and effectively implemented on July 1, 2008.

According to the article 151 of the IJEPA Agreement, Indonesia and Japan may conduct a general review of implementation and operation of the agreement in the fifth year after implementation. The general review serves as a momentum to renegotiate the trade deal.

The initial meeting of IJEPA general review took place in Jakarta on 12 September 2014 and made significant progress on the 6th IJEPA Joint Committee meeting held in Tokyo on November 29-30 November 2017. The meeting also approved the terms of reference (ToR) general review IJEPA.

Previously, Maritime Affairs and Fisheries Minister Susi Pudjiastuti in a meeting with Japanese Foreign Minister Taro Kono in Tokyo in early June 2018 asked Japan to lower or remove fisheries import duties through IJEPA scheme.

Japan charges import duty of 7 per cent for Indonesian fishery products. This policy makes Indonesia’s fishery products uncompetitive compared to Vietnam and Thailand who get exemption of import duties.

Pudjiastuti said Indonesia deserves an import duty exemption as the country is much more vigorous to eradicate illegal fishing than Vietnam and Thailand. In addition, the import duties exemption will also benefit Japanese investors in seafood processing industries.