TPP discussion with House may start next year
The government aims to start discussing the US-led Trans-Pacific Partnership (TPP) with lawmakers next year, demanding political feedback about its intention to join a trade deal that would cover 40 percent of the global economy.
Trade Minister Thomas Lembong said Monday that the government was now undertaking a public review of whether the country would join the TPP before discussing it further with the House of Representatives.
“Based on my estimates, we have to start political consultation with the House in the first half of next year,” he said after delivering opening remarks in a seminar held by the Centre for Strategic and International Studies (CSIS).
Thomas told reporters that while President Joko “Jokowi” Widodo had taken a clear stance that the country would join the US-led trade partnership, the government remained open to public feedback.
Jokowi first expressed Indonesia’s intention to join the TPP when speaking before representatives of a number of American companies during his first official visit to the US in October, resulting in mixed reactions in Indonesia.
Many believe that the TPP, which was signed by 12 countries in New Zealand last month, is set to reduce or eliminate most tariff lines to make prices of products more affordable for consumers of the member countries.
However, the trade pact’s degree of economic liberalization has made others concerned, including the House, which is especially concerned about state firms as the TPP will level the playing field for state-owned enterprises and private companies.
Twelve laws would need to be revised to allow for the implementation of the TPP here, raising more concerns about the supremacy of the trade deal, lawmakers have said. Among the laws are those on investment, state finances, state-owned enterprises, business competition and cooperatives.
Thomas added that Indonesia actually has considerable time to review the TPP as the pact’s member countries were now still in the ratification process to adjust their local laws with articles in the trade deal, meaning that implementation is not yet within sight.
Led by the United States, the TPP’s other signatory countries include Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
The economic partnership, dubbed a 21st century trade pact, will also cover fair competition between state and private firms, intellectual property rights and investor-state dispute settlement (ISDS).
The chairman of the international trade division of the Indonesian Employers Association (Apindo), Yos Adiguna Ginting, said that it had become inevitable for the country to join the TPP because of the opening of access to the global economy, but Indonesia should remain cautious and demand flexible implementation.
Indonesia’s exports to current TPP member countries accounted for 43 percent of Indonesia’s total exports and its imports from the TPP countries made up 61 percent of total imports, said Yos.
“In the case of Indonesia, meanwhile, I think we need to request accelerated and slowed phases of tariff reduction. The agriculture sector, for example, is one that needs more time,” he added.
Todd Dias, the economic secretary at the Australian Embassy in Indonesia, said that he was optimistic that there would be flexibility for new countries willing to join the TPP, although there was not yet a fixed regulation on the matter.
Dato’ Steven CM Wong, the deputy chief executive of Malaysia’s Institute of Strategic and International Studies, said that the first thing to do in reviewing the TPP was to determine the national interest.
Wong said that Malaysia’s decision to join the TPP was also based on consideration that the country already had free trade agreements with most Asian countries and the European continent, but not with those on the North and South American continents.
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