In a move that could only bring good news for both the countries, Japanese Prime Minister Shinzo Abe and Indonesian President Susilo Bambang Yudhoyono on Tuesday signed the Economic Partnership Agreement in Jakarta, eliminating tariffs on more than 90 percent of trade between the countries by 2016.
This is part of Abe's aim to improve Japan's trade ties with other nations. He is slated to discuss a similar deal in India when he goes there tomorrow.
The deal ends most Indonesian import taxes and requires Jakarta to commit to stable energy supplies for Tokyo.
It also abolishes duties on about 96 percent of Japan's exports to Indonesia and on 93 percent of Indonesia's export to Japan.
Sources said that under the accord, Indonesia will also scrap the 15 percent tariff on Japanese steel used by the automotive, electronics and heavy machinery industries.
This is Japan's sixth free-trade pact with a south-east Asian state. Soon after the agreement was signed, Indonesian energy companies Pertamina and Medco Energi Internasional and Japan's Mitsubishi said they would begin building an LNG refinery next year.
marketing@alchempro.com
