In November 2006, Japan and Indonesia jointly announced that, on the basis of a series of negotiations since July 2005, Japan and Indonesia had reached an agreement in principle on all key elements of the Japan-Indonesia Economic Partnership Agreement (`JIEPA`). JIEPA came into force in July 2008. JIEPA became the sixth economic partnership agreement after the agreement with Singapore, Mexico, Malaysia, Chile and Thailand. As part of the agreement, a general review is required within five years and the Indonesian government requested a review in 2013.  Starting in 2015, the two countries agreed to renegotiate the terms of the agreement, with the Indonesian side (under President Joko Widodo) wanting Japanese investors to increase their investments in Indonesian infrastructure.  Negotiations continued in 2018 and 2019, with the initial goal of concluding negotiations by the end of 2019.   In January 2020, negotiations for a renewed agreement continued.  The agreement between the Republic of Indonesia and Japan on an “ijEPA” economic partnership was signed on 20 August 2007 by President Susilo Bambang Yudhoyono and Prime Minister Shinzo Abe at the State Palace. IJEPA will cover a wide range of areas to strengthen the economic partnership between the two countries, including capacity-building cooperation, with the participation of two inter-professional sectors; liberalisation, promotion and facilitation of trade and investment to increase cross-border trade in goods, investment and services; Facilitate the free movement of individuals between the two countries. It also provides for trade and investment in the energy and mineral resources sectors, which aims, among other things, to ensure the security of energy supply in both countries. The scheme aims to protect and develop interests and investment opportunities in this sector in both countries, including electricity generation, exploration and development of oil and gas resources.
The agreement also aims to promote cooperation in this sector, including the development of alternative energy. In addition, IJEPA provides for the exchange of information on public procurement, the protection of intellectual property, the promotion of competition through anti-fighting activities, the improvement of the business environment and the promotion of business confidence. A trade agreement between Japan and Southeast Asian countries (including Indonesia) was put on the market as the idea of Junichiro Koizumi, then Prime Minister of Japan, during his visit to Jakarta in January 2002, when he informed Indonesian President Megawati Sukarnoputri.  Further talks took place between them when Megawati visited Tokyo in June 2003.  After a brief hiatus following Indonesia`s 2004 presidential elections, in which Megawati was replaced by Susilo Bambang Yudhoyono, the progress of the agreement continued in December 2004, when the two countries agreed to form a “study group” to explore a possible free trade agreement.  The results of the task force were published in May 2005 and recommended that negotiations be conducted in parallel with the Japan-ASEAN agreement.  IJEPA is expected to create a climate that will greatly facilitate the resumption of Japanese investment and the construction of its production sites in Indonesia. Indonesia and Japan should also, by signing the IJEPA, promote the economic competitiveness of the two countries and strengthen the partnership through capacity-building cooperation, which will bring prosperity and stability to the peoples of both countries and create an important basis for building an East Asian community.