Indonesia-Japan to sign MoU on import duty on agricultural products

Jakarta (Antara News) - The Indonesian government will sign a memorandum of understanding (MoU) with Japan shortly on the import duty on agricultural and plantation commodities in each of the two countries.

The Director General of the Processing and Marketing of Agricultural Products of the Agriculture Ministry, Djoko Said, disclosed here early this week that President Susilo Bambang Yudhoyono will sign the MoU not later than November this year.

The signing of the MoU is part of the implementation of the Economic Partnership Agreement (EPA) between the two countries, so Japan is expected to give a bigger chance to Indonesia`s agricultural commodities to enter its market, according to Djoko.

Japan has offered a nil percent import duty on 50 kinds of Indonesian agricultural and plantation commodities, especially fruits, while Japan has asked for the import duty exemption on only five of its agricultural commodities.

However, besides asking for the exemption on the five kinds of agricultural products, Japan has also demanded the opening of the Indonesian market for other products, he said. "This demand is one of the factors hampering the negotiations between the two countries," he added.

The 50 kinds of Indonesian agricultural commodities to be exempted from import duty by Japan include banana, jambu ( kind of rose-apple), salak (Zalacca palm fruit) and mangoes.

Japan has asked for an increase in the tariff on plywood, but Indonesia has raised an objection to the proposal as plywood is one of Indonesia`s top export commodities, Djoko said.

He cited the possibility that Japan will also ask Indonesia to lower import duty on automotive products. "Japan has lowered import duty on five agricultural products, but also demanded lower import duty on its non-agricultural commodities," he added.

Actually, Indonesia and Japan have negotiated cooperation in the EPA scheme for a long time. Before holding negotiations on agricultural commodities, the two countries have discussed cooperation in the investment sector and in the enhancement of Indonesian human resources` capacity.

Thus, the EPA will become an embryo of Free Trade Area (FTA), but the EPA is more comprehensive as the agreement includes cooperation outside the trade sector, Djoko said. (*)
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