Jakarta open to TPP now after Obama's US Senate victory

With exports declining every month since last October, Indonesia is now studying the potential impact of TPP on its foreign trade, says Coordinating Minister for Economics Sofyan Djalil.
With exports declining every month since last October, Indonesia is now studying the potential impact of TPP on its foreign trade, says Coordinating Minister for Economics Sofyan Djalil.PHOTO: REUTERS

JAKARTA • Indonesia is now open to joining the Trans-Pacific Partnership (TPP) trade agreement following United States President Barack Obama's victory in a congressional battle over the pact, the country's chief economic minister has said.

The government of South-east Asia's largest economy was initially opposed to joining the TPP, but has had a change of heart since legislation vital to securing the deal was passed by the US Senate in June, Coordinating Minister for Economics Sofyan Djalil added.

"Many policymakers in Asia didn't believe that President Obama will get the mandate," he said in an interview late on Friday.

"TPP is now getting closer and closer to reality, and now the option is to join it or you're left out.

"Of course we have to look at it, we have to study it comprehensively... But, in principle, we don't have any problem."

The TPP would cut trade barriers and harmonise standards across 12 Pacific Rim economies, including Australia and Japan, that have a combined gross domestic product of US$28 trillion (S$38.8 trillion).

US Secretary of State John Kerry expressed confidence on Friday that the pact could be completed this year, even though countries involved failed to overcome feuds over motor vehicle trade, dairy goods and next-generation drugs in their latest negotiations.

Indonesia, whose exports have contracted every month since last October due to a drop in prices of commodities, is now studying the potential impact of TPP on its foreign trade, Mr Djalil said.

The country will also start another round of talks on a free trade agreement with the European Union next month, he added.

Indonesia's exports plunged 12.8 per cent in June, while imports tumbled 17.42 per cent.

The economy grew by 4.67 per cent in the second quarter, its slowest pace since 2009.

REUTERS

A version of this article appeared in the print edition of The Sunday Times on August 09, 2015, with the headline 'Jakarta open to TPP now after Obama's US Senate victory'. Print Edition | Subscribe