Indonesia and Japan ink trade pact

The leaders of Indonesia and Japan signed a free trade pact in Jakarta on Monday that will eliminate well over 90 per cent of tariffs in trade between the two nations that last year was worth $27.2bn.

Under the Economic Partnership Agreement, which is expected to be implemented early next year, Japan will secure much-needed energy supplies while Indonesia will receive unprecedented capacity-building assistance to help raise production standards so its goods meet Japan's strict import criteria.

Some 80 per cent of Japanese tariffs will be removed as soon as the pact is implemented, with another 10 per cent being reduced over the next decade. Indonesia will eliminate 58 per cent of its tariffs immediately upon implementation and another 35 per cent over the next 10 years.

Japanese and Indonesian businesses signed energy deals worth $4.3bn on Monday, to build power stations and develop coal resources and gas fields. Under the latter, Japan's Mitsubishi, Pertamina