Amended Indonesia-Japan Economic Partnership Agreement Reduces Tariffs on Various Goods

Early in 2024, Japan and Indonesia committed to removing trade barriers through the updated Indonesia-Japan Economic Partnership Agreement (IJEPA). The decision to amend the agreement resulted from discussions between Indonesia President Joko Widodo and Japan Prime Minister Fumio Kishida on December 16, 2023, during the Tokyo summit commemorating the 50th anniversary of ASEAN-Japan relations. The amended agreement is expected to be formally signed in the first quarter of this year.
 
The collaborative efforts will lead to reductions and eliminations of tariffs on a wide range of goods, including food products, exchanged between the two nations. Furthermore, both nations have mutually agreed to incorporate a new chapter on e-commerce within the amended agreement, aimed at fostering more liberalized digital trade. Provisions under this new chapter are anticipated to include prohibitions on restrictions of cross-border information transfer, elimination of requirements for the installation of computer-related equipment, and prohibition of requests for disclosure of source code.
 
Late last year, the Indonesian government announced the signing and implementation of trade agreements such as the Indonesia-UAE Comprehensive Partnership Agreement (UAE-CEPA), the Regional Comprehensive Economic Partnership (RCEP), and Indonesia-South Korea CEPA, the  AHKFTA, the Indonesia-Malaysia Border Trade Agreement (BTA), International Coffee Agreement, the AANZFTA, and the Protocol Amending the IJEPA. Through these agreements, Indonesia expanded market access, aiming to cultivate new markets and reduce dependence on traditional ones, thereby enhancing the country's export potential.