Indonesia Encourages Completion of ASEAN-Japan Investment Agreement

By : Herry Barus And Aldo Bella Putra | Wednesday, November 15 2017 - 19:00 IWST

Menteri Perdagangan Enggartiasto Lukita
Menteri Perdagangan Enggartiasto Lukita

INDUSTRY.co.id - Jakarta - Indonesia encourages ASEAN Economic Ministers and Japan's Trade Minister to complete the ASEAN Japan Comprehensive Economic Partnership (AJCEP) negotiations by including Indonesia's proposal on investment agreements.

Trade Minister Enggartiasto Lukita said that after three years of struggle, Indonesia succeeded in incorporating the domestic interest in the Investor States Dispute Settlement (ISDS) in the Protocol to Amend the AJCEP Agreement.

"The protocol will accommodate the investment, service, and movements of the Natural Persons (MNP) agreement into the AJCEP Parent Agreement," Enggartiasto said in a written statement received on Tuesday (11/14/2017)

Thus, Enggartiasto continued, if all parties, including Indonesia, can sign the Protocol by March 2018, the scope of the AJCEP cooperation will be the same as other ASEAN + 1 FTA Agreements on the Trade of Goods, Services and Investment.

The agreement concerning the investment protection achieved is Indonesia's effort in adjusting the International Agreement, in this case the ASEAN and Japan cooperation in the field of investment with the Investment Law.

With the agreed provisions, the handling of disputes between Japanese Investors and the Government of Indonesia can be resolved by mechanisms which in principle provide equal rights for both parties.

In addition to successfully fighting for ISDS issues, Indonesia and Japan have also successfully resolved the issue of transposition of Indonesian tariffs.

Previously, the issue could not be agreed upon since 2010 so that Indonesia cannota implement the AJCEP Master Agreement and plans to implement it from early 2018.

By law, resolving the issue is a prerequisite for Indonesia to be able to sign the AJCEP Accord Amendment Protocol.

For Indonesia, Japan is the third largest non-oil export destination in 2016 with a total trade value of 29 billion US dollars and a trade surplus of 3.2 billion US dollars for Indonesia.

Indonesia's exports to Japan in 2016 amounted to 16.1 billion US dollars and imports amounted to 12.9 billion US dollars. In addition, in the period 2012-2016, Japan is listed as the country's second largest investor in Indonesia with an investment value reached 18.2 billion US dollars.

In the same year, Japan is also ASEAN's 3rd largest trading partner. The value of ASEAN-Japan trade reached 221.7 billion US dollars, or about 10 percent of the total value of ASEAN trade with other countries.

Japan's total direct investment (FDI) to ASEAN amounts to 14 billion US dollars or 14.5 percent of the total FDI value in ASEAN.

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