Indonesia to apply for CPTPP membership this year: minister
Nikkei Asia | 24 May 2024
Indonesia to apply for CPTPP membership this year: minister
TOKYO — Indonesia will apply to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership trade pact "within this year," Coordinating Minister for Economic Affairs Airlangga Hartarto said Friday, seeking a faster export boost than from bilateral deals.
Southeast Asia’s biggest economy has concluded the internal process for submitting the application, Hartarto told Nikkei on the sidelines of the Future of Asia forum.
Economic competition with CPTPP members is different than with China for Indonesia, which seeks to protect the small and midsize businesses that make up 60% of its gross domestic product, Hartarto said.
"With China, they are competing directly with micro, small, medium enterprises," he said. "But the countries in [the CPTPP] are different in products as well as in distance."
Joining the CPTPP represents a "low-hanging fruit" for Indonesia on trade, the minister told the audience at the Future of Asia.
Indonesia wants to have free trade agreements with many countries, but bilateral negotiations take time, Hartarto said, pointing to the seven-year process to forge an FTA with the European Union. Those negotiations are still ongoing.
Hartarto noted the CPTPP’s potential to drive export growth for Indonesia, which is trying to move downstream from raw materials to higher-value-added manufactured goods.
"It will open the U.K. market, as well as a few countries in South America, including Mexico," an auto export destination, he said.
Hartarto said Indonesia’s main concern for CPTPP accession will be the potential for high energy prices.
The CPTPP’s members are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The U.K. has been approved to join.
Indonesia is heading into a political transition after this year’s presidential election, with Prabowo Subianto set to succeed incumbent Joko Widodo.
The "keys of the stable economic growth in Indonesia are political and social stability," said Hartarto, a senior member of Widodo’s cabinet.
Economic transformation priorities for the country include science and technology, green economy and digitalization. He vowed the government will continue structural reforms to ease doing business in Indonesia.
"The government also continues to combine conventional growth engines such as infrastructure development, food security and international cooperation" with new drivers, Hartarto said.
