RCEP Negotiations to Conclude by 2017: Trade Minister

Indonesian Trade Minister Enggartiasto Lukita, left, and his Australian counterpart Steven Ciobo in this Aug. 3, 2016 file photo. (JG Photo/Megan Herndon)

By : Tabita Diela | on 8:10 PM December 06, 2016
Category : Business, Trade

Jakarta. Trade Minister Enggartiasto Lukita expects the 16 nations participating in the Regional Comprehensive Economic Partnership, or RCEP, to reach an agreement next year, allowing Indonesia to start reaping benefits from the free-trade deal immediately.

"We cannot afford to prolong negotiations at a time when the global trade outlook continues to be bleak," Enggartiasto said in his speech at the opening of the 16th RCEP negotiating committee meeting in Tangerang, Banten, on Tuesday (06/12).

Enggartiasto cited rising protectionism in both advanced and developing countries following the United States' decision to back away from the Trans-Pacific Partnership (TPP) agreement as a reason not to postpone the discussion any further.

The meeting, which will last until Friday, is a follow-up from the so-called intersessional meeting in Cebu, the Philippines, on Nov. 3-4, where delegates from China and India finally met to discuss the issue.

"We hope to reach an agreement so a decision can be made at the high-level meeting," he told reporters.

The China-backed RCEP is one of a few mega-regional economic pacts that rose to prominence following frustrating deadlocks in multilateral trade negotiations at the World Trade Organization in the past few years. The pacts are supposed to bring together bilateral agreements and offer trade and investment benefits through regional liberalization.

Progress in the RCEP negotiations has been sluggish since it began four years ago between the 10 member states of the Association of Southeast Asian Nations (Asean) and six trade partners – Australia, China, India, Japan, South Korea and New Zealand.

The RCEP would integrate regional markets with a combined gross domestic product of about $22.4 trillion, or 30 percent of global trade, and a combined population of 3 billion people, or about 45 percent of the world population, providing a potential market for Indonesia, Enggartiasto said in his speech.

The numbers may seem promising, but Indonesia has so far only had positive trade balances with half of the states participating in the RCEP.

According to data from the Ministry of Trade, Indonesia's trade balance was still in a deficit with Malaysia, Singapore, Thailand, China, Australia and New Zealand as of September.

"Look, we can't hide from globalization. The main point is that we should take the things that bring benefits to us," Enggartiasto told reporters.

He did not elaborate on Indonesia's terms in the agreement, except for stating that the country's demands on tax has yet to be discussed and that it needs to keep its trade balance positive amid regional liberalization.

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