Indonesia open to Trans-Pacific Trade Agreement
Indonesia is now open to joining the Trans-Pacific Partnership (TPP) trade agreement after U.S. President Barack Obama’s June 2015 victory in a congressional battle over the pact.
The TPP would cut trade barriers and harmonize standards across 12 Pacific rim economies, including Australia and Japan, that have a combined gross domestic product of U.S. $28 trillion.
The government of Southeast Asia’s largest economy was initially opposed to joining the TPP but has had a change of heart since legislation vital to securing the deal was passed by the U.S. Senate in June, Coordinating Minister for Economics Sofyan Djalil said.
“Many policymakers in Asia didn’t believe that President Obama will get the mandate,” Djalil said. “TPP is now getting closer and closer to reality, and now the option is to join it or you’re left out.”
“Of course we have to look at it, we have to study it comprehensively … But in principal, we don’t have any problem.”
U.S. Secretary of State John Kerry expressed confidence that the pact could be completed in 2015 even though countries involved failed to overcome feuds over auto trade, dairy goods and next-generation drugs in their latest negotiations.
Indonesia, whose exports have contracted every month since October 2014 due to a drop in commodities, is now studying the potential impact of TPP on its foreign trade, Djalil said.
The country will also start another round of talks on a free trade agreement with the European Union next month, he added.
Indonesia’s exports plunged 12.8 percent in June 2015, while imports tumbled 17.42 percent. The economy grew by 4.67 percent in the second quarter, its slowest pace since 2009.