The 6th Regional Comprehensive Economic Partnership (RCEP) Ministerial Meeting In Singapore on August 30 - Photo by Trade Ministry Office

JAKARTA (TheInsiderStories) – Indonesia and Association of Southeast Asian Nations (ASEAN) keep pushing the settlement of free trade agreements (FTA) to face the global turbulences. The move aims to improve and widen market access for Indonesia and ASEAN’ exports to bring more foreign exchange revenues in the region.

Indonesia is hoping to seal at least 13 bilateral and regional trade agreements, followed by a comprehensive economic partnership agreement (CEPA) with several countries. Otherwise, in Latin America, Indonesia will speed up negotiations with Chile, through Indonesia-Chile CEPA.

Minister of Trade Enggartiasto Lukita acknowledged that Indonesia lagged behind Vietnam and the Philippines in terms of market access. While enjoying a commodity boom, Indonesia neglected downstream industry while the other countries worked hard to attract investors and create free trade access.

“President (Joko Widodo) warned us, our economy and inflation are stable, yet there is no significant progress (for exports) compared to peer countries because we are late to open up our regions,” he said.

In 2018, the government expects to continue six trade negotiations namely Indonesia-Australia CEPA, Indonesia-European FTA, Indonesia-European Union CEPA, Indonesia-Iran Preferential Trade Agreement (PTA), RCEP, and Indonesia-Malaysia Border Trade Agreement.

This year, Indonesia also finalize a review on the Indonesia-Japan Economic Partnership Agreement, Indonesia-Pakistan PTA, Indonesia-Asean Economic Society, Asean-Australia-New Zealand FTA, and Asean-India FTA. Early this year, the government started Trade in Goods negotiations with Turkey, Nigeria, Sri Lanka, and Bangladesh.

In the meeting of ASEAN Economic Ministers and six FTA partner countries in Singapore on August 30-31, the members resumes the continuing the RCEP. The ministers also committed to accelerating the completion of the RCEP this year to increase regional trade amid strengthening global economic uncertainty.

“Indonesia encourages all RCEP participating countries to be realistic and willing agree on acceptable completion steps for each country in achieving substantial negotiations at the end of this year,” said Lukita in written statement on Sept. 1.

He continued, some issues that are still pending and accelerated are the trade in goods, services, investment, competition, and intellectual property. The main obstacle in the completion of the RCEP negotiations is a gap in development rates between 16 countries RCEP participants, from less developed countries to developed countries.

To date, 16 RCEP participating countries remain committed to continuing negotiations until finished. ASEAN continues to work to bridge the gap between participating countries, in particular between ASEAN and ASEAN FTA Partners also among FTA Partners themselves.

According to the trade minister, one of the efforts to accelerate the RCEP agreement is to deliver proposed completion package for year-end deliverables. RCEP’ economic ministers succeeded in pouring several steps and principles completion of the trade agreement negotiations to be followed up by negotiators who will conduct Round 24 negotiations in Auckland, New Zealand in October 2018.

In addition, during this meeting RCEP economic ministers again stated
his commitment to complete this negotiation as soon as possible so as not to lose momentum in times of growing trade pressure lately.

Cooperation with the Neighboring Countries

At the same meeting, Indonesia and ASEAN also committed to strengthen its commitment to cooperate with the country partners in East Asia namely China, South Korea and Japan. The series of ASEAN meetings with partner countries in the East Asia region began with ASEAN-Japan meeting.

At this meeting the ministers discussed the developments implementation of the ASEAN-Japan Agreement for the 2018 period, as well as collecting necessary matters delivered to the head of State at a meeting of the ASEAN-Japan Summit which is planned to take place in November 2018.

The ministers expect the Protocol First changes to the ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP) can
jointly signed at that time.

“We hope that Indonesian businesses can utilize this agreement to expand and deepen the top regional value chains the sectors that are in the interest of Indonesia as a member of ASEAN with Japan,” said Lukita.

In addition, the ministers also welcomed the progress of the implementation of Economic Cooperation ASEAN-Japan Strategic in various fields, including trade facilitation, rights Intellectual Property, micro, small and medium enterprises, infrastructure, energy, innovation and technology transfer.

Previously, the ASEAN economic ministers had held consultations with China.
At the meeting, the ministers discussed the development of the completion of the protocol ratification Improvement of the ASEAN-China Free Trade Area (ACFTA) by all parties.

Also noted the progress reports on the implementation of ASEAN and China on Production Capacity Cooperation, which has been agreed upon in 2016,  as well as cooperation in the field of infrastructure connectivity that was agreed upon in the year.

On the same day, the ASEAN Economic Ministers also held a consultation meeting with South Korea. One of the issues discussed was regarding the development of the ratification settlement Third Protocol for Amending the Agreement on the Trading of Goods in Free Trade Areas ASEAN-South Korea (AKTIG). The ratification is attempted to be completed by November 2018.

Trade Performance with East Asia Partners 

Japan is the 4th largest of ASEAN trading partner. ASEAN-Japan trade value reaches US$218 billion in 2017, equivalent to 8.5 percent of total ASEAN trade. Japan is also the second largest investor in ASEAN with the value of foreign direct investment (FDI) reaching $3.2 billion, equivalent to 9.6 percent of the total Japanese FDI to ASEAN.

While, China is ASEAN’s largest trading partner with a total trade of $436.8
billion, equivalent to 17.1 percent of ASEAN’s total trade value in 2017. For investment side, in 2017 ASEAN received FDI of $11.3 billion from
China and placing the Panda’ country as the 3rd largest investor of total ASEAN’ investment.

As for South Korea is ASEAN’s 5th largest trading partner. The total trade value between ASEAN and South Korea in 2017 reached $152.5 billion, or equivalent to 6 percent of the total ASEAN trade. In the investment sector, South Korea was ranked 5th largest with total FDI amounted to $5.3 billion.

Email: linda.silaen@theinsiderstories.com

SHARE
Previous articleMorning Briefing: Indonesia for Olympics 2032
Next articleAlibaba’s Jack Ma met Indonesian President Joko Widodo
The Insider Stories Founder Linda Silaen has a solid, proven history, established over more than a decade as a journalist with a leading internasional news organization, of being the first with the biggest economic news stories in Indonesia. Specializing in corporate news, Linda is also a veteran of some of the biggest macroeconomic and general news stories as Indonesia rapidly transforms into a major market economy. One of the founders of the original blog from which this company developed, Linda’s knowledge of investors’ information communications and data us developed from unrivaled networking skills that make her a well-known name among CEOs, bankers, government officials and private equity investors both in Indonesia and other countries.

LEAVE A REPLY

Please enter your comment!
Please enter your name here