Global Economy - Photo by IMF

JAKARTA (TheInsiderStories) – The global economy is undergoing structural changes. After the annual meeting of the World Economic Forum in Davos, Switzerland, several countries rushed to establish the trade cooperation.

Last week, for an example, there was a cooperation agreement between four countries, namely the European Union (EU), Japan, United States, and China. The EU-Japan Economic Partnership Agreement (EPA) has enters into force on late Feb. 1 to eliminate all trade costs between the two camps.

In Japan-EU EPA, it will be the largest trade agreement signed by the tow countries, encompassing 640 million peoples and 28 percent of the world’ GDP.

Even still awaiting legislature’ decision, Japan will be able to buy imported consumer products from Europe such as wine, pork, bags and pharmaceutical products at low prices. Likewise, the EU will be able to buy imported products from Japan such as engine parts, tea and fish at lower prices.

Meanwhile, ongoing trade negotiation between Washington and Beijing are likely to lead to a final agreement, followed President Donald Trump planned to meet directly with President Xi Jin Ping at the end of February. The two-days talks will cover export tariffs and barriers.

The US under President Trump, has announced a series of protectionist trade policies in rapid succession to re-negotiations of the US-Korea Free Trade Agreement (FTA) and North American Free Trade Agreement (NAFTA). The trade policies being implemented are undermining confidence in the rule-based international trading system.

Should the Japan-EU EPA and US-China agreement take effect, the global trade map to be change and will give affect to other countries, such as Indonesia. For Indonesia, these agreement has give positive impacts to the financial market since late week.

But, in term of trade, the country get a challenge on the export goals, especially from the agreement between US and China. To face the challenges, Indonesia started to reviewed the trade policy and export destination to the non traditional market.

Expected, by this and the opening the taps of cooperation with Africa, Asia, the Middle East, a trade balance can be surplus this year, even Indonesia has not completed a trade agreement with several export destination countries.

Written by Daniel Deha, Email: theinsiderstories@gmail.com

LEAVE A REPLY

Please enter your comment!
Please enter your name here