A free trade agreement (FTA) between Indonesia and Japan will not pose a threat to a similar trade deal currently being developed between Japan and Southeast Asian countries, an official said.

"The bilateral trade agreement (between Indonesia and Japan) would instead accelerate the process in establishing ASEAN-Japan FTA," the Ministry of Trade's director general for international cooperation Pos Hutabarat was quoted Tuesday by The Jakarta Post newspaper as saying.

Officials from both countries met here Monday to hold preliminary talks on bilateral FTA, whereas the Association of Southeast Asian Nations (ASEAN) is scheduled in April to start trade liberalization talks with Japan.

Monday's meeting discussed, among other things, the cost and benefits of establishing an Indonesia-Japan FTA, Pos said, adding that he has yet to make a formal calculation on how the FTA would boost trade between the two countries.

The meeting is the first of three scheduled sets of talks aheadof formal negotiations for a preferential trade agreement. The preliminary talks will produce a full-scale assessment on FTA in mid-April to be submitted to relevant ministers of the two countries, Pos said.

Afterward, the ministers will determine whether or not an Indonesia-Japan FTA is needed, and if it is deemed necessary, they will decide when negotiations will start, he explained.

The meeting is expected to explore import duties, labor regulations, immigration, taxation, trade facilitation and investment issues in both countries.

A bilateral trade agreement is considered a faster measure in liberalizing trade between nations compared to deals involving more than two countries.

According to Pos, neighboring countries are ahead of Indonesia in establishing FTAs with Japan. Singapore and the Philippines have already signed such agreements, but only the city-state has implemented the deal as the Philippines is still straightening outseveral technical details.

Negotiations with Thailand and Malaysia are also under way, andare unlikely to be completed anytime soon, Pos said, citing agricultural and investment issues as among the obstacles.

ASEAN and Japanese leaders agreed at last year's ASEAN summit in Laos to commence negotiations in April 2005, and to conclude the talks within two years.

The six founding ASEAN members and Japan made a schedule to establish a free trade area by 2012, and the newer members by 2017.

Founding ASEAN members are Brunei, Malaysia, Indonesia, the Philippines, Singapore and Thailand, while Cambodia, Myanmar, Laosand Vietnam joined later.

Source: Xinhua