President Joko "Jokowi" Widodo has insisted that Indonesia must join multilateral free-trade agreements to deal with regional and global competition.

In 2016, the government would focus on improving the national economy to boost competitiveness in the midst of global and regional changes, including the ASEAN Economic Community (AEC), the president said.

"Inevitably we have to calculate the costs and benefits of joining. Otherwise, our export products will be subject to taxes of 15 to 20 percent, maybe higher. That means our products will not be competitive," Jokowi said during the Indonesian Military (TNI) and National Police executive meeting in Jakarta on Friday.

The government is currently considering joining three trade agreements: First, the Indonesia-EU Comprehensive Economic Partnership Agreement (CEPA), a free trade agreement with the European bloc, second, the US-led free-trade area across 12 Pacific Rim countries, the Trans Pacific Partnership (TPP), and third, the Regional Comprehensive Economic Partnership (RCEP) between ASEAN and six other states, with China as the key driver.

Jokowi underlined the need for swift transformation to respond to global changes and to leave behind old patterns. "Productivity, work ethic, competitiveness, professionalism are key," he stressed.

According to the World Bank's Indonesia Economic Quarterly published last month, whether Indonesia join the TPP or not, the pact is likely to have implications for its economy.

Carefully assessing the relative costs and benefits of TPP membership will be important to ensuring that Indonesia uses it as an opportunity to revitalize its non-commodity tradable sector and spur economic growth, the report says.

The report also states that TPP member countries account for a significant share of Indonesian exports, particularly in manufacturing. However, the import tariffs against Indonesian products in these countries are already low, as Indonesia has bilateral trade agreements with most of them.

Jokowi further said the military and police had to be able to support Indonesia's competitiveness, especially in land acquisition and labor problems, to trim the high costs of the domestic economy.

"I order them to fight and eradicate all forms of extortion, be it at ports, airports, factories or roads, and to take action against mafia or cartels, be it in agriculture, energy, illegal fishing, illegal mining or illegal logging," Jokowi said. (ags)(+)

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