IDXChannel - Indonesian Minister of Trade Zulkifli Hasan and Japanese Minister of Foreign Affairs Yoko Kamikawa signed the Indonesia-Japan Economic Partnership Agreement (IJEPA) Protocol Amendment in early August 2024.

"We hope that the IJEPA agreement can be utilized promptly by businesses to support the economic groth and prosperity of both countries," the Indonesian minister said in a media release.

This strategic economic agreement encompasses several crucial aspects in the Indonesia-Japan trade relations. One of the highlights of the agreement is the improvement of market access for Indonesian export products to Japan across 112 tariff lines, including processed fishery products. This is expected to enhance the competitiveness of Indonesian businesses against competitors.

In the services trade, the agreement also provides opportunities for closer cooperation in the banking sector and trade through electronic systems, facilitation for SMEs in utilizing digital platforms (marketplaces), capacity building, training, research, and e-commerce utilization.

Both countries are also ready to collaborate in various sectors including automotive, mold and dies, enhancing caregiver competency, developing medical equipment testing facilities, creative economy, and real estate capacity building.

Furthermore, Japan has committed to broader access for employment and facilitating the placement of skilled workers from Indonesia, not limited to caregivers and nurses.

The IJEPA agreement is Indonesia's first bilateral economic agreement implemented since 2008. Following the Comprehensive Review in 2018, both countries agreed to enhance their bilateral economic relations under a more modern framework through the Protocol Amendment.

This signing marks a historic moment after lengthy and intensive negotiations over five years. The substantive conclusion of the IJEPA Protocol Amendment negotiations was announced by Indonesian President Joko Widodo (Jokowi) and Japanese Prime Minister Fumio Kishida in Tokyo last year.

Japan is Indonesia's fourth largest trading partner. The total trade value over the past five years has increased by 9 persen annually from USD31 billion in 2019 to USD37 billion in 2023. Indonesia has experienced a trade surplus with Japan over the past five years, with a 13 percent increase in the 2019-2023 period. Key Indonesian exports to Japan include coal, copper ores, nickel, electrical equipment, natural rubber, agricultural products, plywood, and paper products. (Wahyu Dwi Anggoro)