The government should not be hasty in joining the Trans-Pacific Partnership (TPP) because the country'€™s industries still need to improve, analysts and businesspeople have said.

Djisman Simandjuntak, a senior economist with the Centre for Strategic and International Studies (CSIS), said Wednesday that the government needed to first comprehend the consequences of joining the TPP.

'€œWe can'€™t narrow the question to only joining or not joining and when to join. We must also prepare ourselves,'€ he said during a discussion held by CSIS in Central Jakarta.

Djisman explained that joining the TPP would mean that the government would agree to liberalizing the trade of goods and services. This would mean that the government would not be able to regulate minimum local content or employment in foreign direct investments (FDIs) or give higher protections to intellectual property rights. He said that Indonesia was not even ready to implement free trade in services within the confines of the ASEAN Economic Community (AEC) next year as it needed to request another two-years in order to be properly prepared.

The government needs to develop the country'€™s industry and increase its competitiveness first before joining the pact, Djisman concluded.
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'€œIt is true that textile and footwear industries will benefit from the TPP, but our sectors are not just those.'€

The TPP currently comprises 12 countries with a total population of 808.7 million and a combined gross domestic product (GDP) of US$27.8 trillion. The full text of the deal, the negotiation of which sparked debate around the world about its highly secretive nature, was released last week. Among the most-discussed points are the equal treatment of state-owned, private and foreign enterprises, investor-state dispute settlement (ISDS) through international arbitration and the elimination of export-import tariffs.

President director of cosmetics producer Mustika Ratu, Putri Kuswisnu Wardani, said that the TPP would make Indonesia a trading country only instead of an industrial country. She said that the majority of Indonesia'€™s players were small and medium enterprises (UKM), which probably would face difficulties and would not be able to survive competing with foreign heavyweights.

'€œIt is true that textile and footwear industries will benefit from the TPP, but our sectors are not just those,'€ she said.

The Indonesian Textile Association (API) and the Indonesian Footwear Association (Aprisindo) previously asked the government to join the TPP to increase the competitiveness of local textile products against those of Vietnam, which is a TPP participating country.

Meanwhile, Indonesian Employers Association (Apindo) executive board chairman Anton J. Supit said that participation in the TPP could trigger reforms in the country'€™s business sector such as deregulation.

'€œIf Indonesia doesn'€™t join the TPP, we can'€™t optimize our free trade agreements with the participating countries and we will lose some export markets,'€ he said, urging the government to form an ad-hoc team to assess the plan to join the TPP.

The coordinating economic ministry'€™s international economic cooperation deputy Rizal Affandi Lukman said that the government planned to join the pact in two years and was in process of assessing the pros and cons of such a plan.

'€œWe invite economists, businesspeople and academics to discuss this with us,'€ he said.

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