Japan and Indonesia has signed a bilateral trade agreement yesterday, in efforts to boost trade and investment between the two countries. The agreement will take effect immediately, but it will be implemented in stages over the years and is expect to be fully implemented only in 2016, with tariffs eliminated on more than 90% of the trade between the two countries.

Under the new trade agreement, Indonesia will reduce or eliminate tariffs of about 93% of its 11,163 tariffs, with 58% to be eliminated immediately. In turn, Japan will reduce more than 90% of its 9,275 tariffs, with 80% to be cut immediately, including those for textile and agricultural products. Japan is Indonesia’s biggest export market.

Indonesia will remove tariffs on Japanese cars and auto parts by 2016, and Japan will immediately remove tariffs on almost all industrial products from Indonesia.

What has happened to the JMEPA (Japan-Malaysia Economic Partnership Agreement) between Malaysia and Japan talked about back in mid-2005? Is it in effect now? Is it the reason why Mitsubishi has managed to price the Lancer so aggressively?

There was previously a report by AFX News that Volkswagen’s keen interest in Proton was to take advantage of the Japan-Malaysia Economic Partnership so it could use Malaysia to export to Japan. There was also a previous report about Volkswagen planning a plant in Japan. How does this affect the Volkswagen and Proton talks?

Japan-Indonesia Economic Partnership Agreement
AFX News: Malaysia Proton shortlists Volkswagen as strategic partner
WSJ: Japan-Indonesia Pact
To Expand Economic Ties

Bloomberg: Indonesia, Japan Sign Trade Deal to End Most Tariffs
Edmunds: VW-Proton Talks Sputter
Reuters: Volkswagen to set up plant in Indonesia

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JMEPA: The reason Volkswagen wants Proton?
Cheaper Japanese vehicles but with a condition?
Volkswagen to build assembly plant in Indonesia?
Volkswagen looking at Indonesia instead?