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Indonesia to focus on increasing competitiveness before joining TPP
Thomas Lembong
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Thomas Lembong. (Courtesy of tempo.co)
Indonesian Trade Minister Thomas Lembong said on Friday that the government would focus on strengthening the competitiveness of the national industry before joining the free trade pactTrans Pacific Partnership (TPP).
"It will take two years to pursue the TPP agreement. [Indonesia joining the TPP] is a major concern for President Jokowi," Thomas told reporters.
The trade minister added that the government was aware of the threat of the TPP toward Indonesia's manufacturing products, especially textiles and textile products (TPT), adding that Vietnam, which was the main competitor in the textile industry, joined the TPP.
"This is a real threat, especially Vietnam, which has recently completed a free trade agreement with the European Union. It will be make Vietnam's market bigger since the European Union is composed of 20 countries. So indeed we have been left behind,' Thomas asserted.
Thomas said that by joining the US-initiated pact, Vietnam's products would be more competitive in the Indonesian market in the upcoming ASEAN Economic Community (AEC), starting December 2015.
'Indonesia's textile market in the US and Japan could be taken over by TPP members,' he added.
The US along with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam have joined the TPP trade deal. The 12 countries comprise 40 percent of world trade.
"This is a major market in the world," Thomas said.
Indonesia's manufacturers said that they had been concerned since Malaysia and Vietnam joined with eight countries in the TPP agreement.
Both countries' products would be more competitive with tariff cuts and less barriers, which in turn would endanger Indonesia's market share, secretary-general of the Indonesia Textile Association (API) Ernovian Ismy said.
The Indonesian Textile Association (API) data shows Indonesia exported US$12 billion in TPT last year. The biggest markets were the US (36 percent), the Middle East (23 percent), Europe (16 percent), Japan (7 percent) and Southeast Asia (7 percent). (dan)(++++)
