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Friday, June 3, 2005

Jakarta leader backs FTA talks but balks on UNSC bid


By MAYUMI NEGISHI and KANAKO TAKAHARA
Staff writers

Prime Minister Junichiro Koizumi and Indonesian President Susilo Bambang Yudhoyono agreed Thursday to launch talks for a free-trade accord as part of a comprehensive bilateral economic partnership.

News photo
Visiting Indonesian President Susilo Bambang Yudhoyono and Prime Minister Junichiro Koizumi fete their Thursday signing of documents to formalize the launch of bilateral free-trade negotiations.

"I am confident (the agreement) will lead to a deeper integration between the two economies," Yudhoyono said in a symposium earlier in the day in Tokyo's Chiyoda Ward.

He and Koizumi said in a joint statement that an agreement covering trade, investment, people flows, technological exchanges and intellectual property rights would enlarge markets in both countries and help enhance Japan's comprehensive economic partnership with the 10-member Association of Southeast Asian Nations.

For its part, Indonesia will work to create an investment-friendly environment by fighting corruption, improving labor-management relations and revamping its tax system, Yudhoyono said in his speech at the symposium.

"I hope that Japanese investment will double in the next five years," he said.

The two sides agreed to commence negotiations by next month, hoping to reach a basic accord by July next year.

For Japan, which sees FTAs as a means to bolster its influence in Asia, an agreement with Indonesia presents strategic attractions. Trade minister Shoichi Nakagawa the previous day was quoted as saying stronger ties with Indonesia were essential for Tokyo to succeed in FTA negotiations with ASEAN.

A major provider of natural resources, including crude oil, coal and natural gas, to both Japan and China, Indonesia is one of the areas where the two Asian powers, as well as India, could potentially rub shoulders over energy rights in the future.

China is also in negotiations for an FTA with ASEAN.

Japan has signed two free-trade agreements so far, with Singapore and Mexico. It reached a basic agreement with the Philippines in November and another with Malaysia earlier this month.

Trade between Japan and Indonesia in fiscal 2004 totaled 3.1 trillion yen.

During their meeting, Koizumi asked Yudhoyono to support Japan's bid for a seat on the United Nations Security Council. Yudhoyono declined for the time being.

He was quoted by a Foreign Ministry official as saying, "Japan deserves a seat from its post-World War II record of service toward nations in Asia and around the world. But we also have internal concerns, and I would like to make the appropriate decision when the time comes."

In Indonesia, U.N. reform is still under debate.



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