APEC 2017: Indonesia to Expedite RCEP, CEPA Negotiations

Photo by APEC

JAKARTA (TheInsiderStories) – As the Asia Pacific Economic Cooperation (APEC) leaders will hold a summit in Vietnam’s coastal town of Da Nang at the end of this week, two trading groups have resurfaced, namely, the failed of Trans Pacific Partnership (TPP) and the China-led Regional Economic Comprehensive Partnership (RCEP).

For Indonesia, the RECP now looks more attractive and is keen to speed up the talks after U.S President Donald Trump decided to extract the country from TPP. Indonesian Minister of Trade Enggartiasto Lukita stated that Indonesia will focus on the Regional Economic Comprehensive Partnership (RECP) to upgrade trade activity and boost trade volume, in place of TPP.

In addition to RECP, the Indonesian government is determined to expedite negotiations on the Comprehensive Economic Partnership Agreement (CEPA), the linkage of which is Indonesia-Chile CEPA (IC-CEPA), Indonesia-European Free Trade Association/EFTA CEPA (IE-CEPA) and Indonesia-Australia CEPA (IA-CEPA).

The partnership is a free trade agreement (FTA) established among ASEAN member nations and supported by China. The members participating in the talks include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

It involves six of ASEAN’s main trade partners not bound by prior free trade deals – Australia, China, India, Japan, South Korea and New Zealand – and is set to cover 30 percent of the world’s economy and a market of 3.4 billion people, with a combined gross domestic product (GDP) of US$21.4 bilion.

‘We will concentrate on RCEP and pursue talks with dialogue partners on trade cooperation,’ Enggartiasto Lukita promised, on Monday (Nov. 6).

He said the country is pushing for a resolution in 2017, amid a range of contentious issues, including trade in goods & services and investment, as reflected by the previous snail-paced progress.

Lukita remarked that in the face of rising protectionism and escalating uncertainties, triggered by (among other factors) the demise of the TPP following Donald Trump’s election victory and Brexit, ASEAN and its partners needed to accelerate ongoing negotiations to open their markets.

‘We cannot afford to drag this out further at a time when the global trade outlook continues to be bleak, coupled with rising protectionism in both advanced and developing countries,​’ he said.

The World Trade Organization (WTO) estimate for growth in world merchandise trade volume in 2017 was reset to 3.6 per cent, after previously being estimated at 2.4 per cent (set within a range of 1.8~3.6 per cent, reflecting a high level of economic and policy uncertainty). The new estimate shifts the focus to the top end of that range.

Growth of 3.6 per cent would represent a substantial improvement on the lackluster 1.3 per cent increase reported in 2016. Reflecting a continued forecast risk arising from deep uncertainty about near-term economic and policy developments, the range of estimates for world trade growth has been adjusted to 3.2~3.9 per cent.

Stronger growth in 2017 was attributed to a resurgence of Asian trade flows as intra-regional shipments picked up and as import demand in North America recovered after stalling in 2016.

Indonesia is also scheduled to hold ministerial talks with several countries to discuss the possibilities for industrial collaboration between the two nations during the Asia Pacific Economic Cooperation (APEC) summit in Da Nang, Vietnam next week,

The bilateral talks among the Trade Ministers would cover cooperation in shipbuilding, machinery, food processing, agriculture and ‘smart’ city technologies

‘We will also seek opportunities to initiate bilateral talks with other Southeast Asian countries during the APEC summit.’ he said.


The Indonesian has conveyed a message to its trading partners that it is committed to bring the talks on CEPA to a positive conclusion. ‘As we approach the end of this year, the three negotiations will be accelerated so that the negotiations can be completed in line with target,’ Director for Bilateral Negotiations at the Trade Ministry Ni Made Ayu Marthini said on Monday.

The six rounds of talks on IC-CEPA are being held on Nov. 6 to 10, with a focus on negotiations on ‘trade in goods’, followed by investment, services and others. In Jan-Aug, 2017, total trade between Indonesia and Chile increased 27 per cent to $201.31 million from US$158.36 million in the same period last year.

Meanwhile, IE-CEPA negotiations are now entering the 13th round, which is also being held on Nov 7 to 10. These cover a broader area, namely, services, trade and investment.

The Head of the Indonesian delegation for IE-CEPA Soemadi DM Brotodiningrat said that while the Indonesian government will not focus on completing the talks, it will more importantly strive to assure results that are mutually beneficial. ‘The main issue being discussed is market access for trading of goods, services as well as investment,’ he noted.

Written by Elisa Valenta, email: elisa.valenta@theinsiderstories.com