In 2007, Indonesia and Japan signed the Indonesia-Japan Economic Partnership Agreement (IJEPA), marking a significant milestone as Indonesia's first bilateral trade agreement.
This agreement, which has been in force since 2008, has had a profound impact on both countries economies. By removing or reducing tariffs on 90 percent of goods, particularly in the agricultural and industrial sectors, IJEPA has facilitated robust trade between Japan and Indonesia.
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Furthermore, IJEPA has facilitated the establishment of service centers by Japanese businesses in Indonesia, focusing on electronic and IT equipment. This agreement not only promotes trade but also enables technological transfers and workforce training, contributing to Indonesia's economic development.
In 2022, Japan emerged as Indonesia's third-largest trading partner and the fourth-largest source of foreign investment.