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Jakarta Post
The Jakarta Post
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TPP officially signed, Indonesia to amend 12 laws

  • Ayomi Amindoni & Anton Hermansyah

    The Jakarta Post

Jakarta | Fri, February 5 2016 | 08:34 am
TPP officially signed, Indonesia to amend 12 laws Historic deal: Trade delegates pose for a photograph after signing the Trans-Pacific Partnership Agreement in Auckland, New Zealand, Thursday, Feb. 4, 2016. Trade ministers from 12 Pacific Rim countries including the United States have ceremonially signed the free-trade deal. (David Rowland/SNPA via AP)(David Rowland/SNPA via AP)

Historic deal: Trade delegates pose for a photograph after signing the Trans-Pacific Partnership Agreement in Auckland, New Zealand, Thursday, Feb. 4, 2016. Trade ministers from 12 Pacific Rim countries including the United States have ceremonially signed the free-trade deal. (David Rowland/SNPA via AP)

The government will intensify discussion in the House of Representatives on Indonesia's intention to join the Trans Pacific Partnership (TPP), which was effectively signed in New Zealand on Thursday, despite rejections from the public and even some House members.

According to Trade Minister Thomas Lembong, the intensive discussions are necessary to synchronize several regulations in order to adjust to the Pacific Rim trade pact. Talks will concern, among other things, state-owned enterprises (SOEs) privatization and intellectual property rights.

"The TPP regulates fair competition and how each member regulates its government's treatment of its SOEs. Based on our estimation, at least 12 laws and bills needs to be revised if we join the TPP," Thomas said at the House complex in Jakarta on Thursday.

The US-led trade agreement, he continued, stipulated no special treatment for SOEs. If Indonesia joined, state-owned companies would share an equal position with non-SOEs, whether local or foreign.

The chairman of House Commission VI overseeing SOEs Achmad Hafsz Tohir explained the lawmakers and the government had to first amend several regulations including a bill on SOEs, a bill on investment and a bill on business competition to pave the way for joining the TPP.

This year alone, the commission must complete bills on business competition and on SOEs. "If Indonesia insists on joining the TPP, it will take at least two years to amend the regulations," he added.

On Thursday, trade ministers of the 12 Pacific Rim countries slated to join the TPP gathered in Auckland, New Zealand, to sign the deal. The 12 countries involved at this stage account for 40% of the world's economy.

The agreement has been signed by the US, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru.

The signing brings the trade pact another leap closer to becoming a reality as the 12 members have two years to ratify or reject the pact. However, the TPP is predicted to have a negative impact on labor standards, food security, health and environmental protections.

"Today is the important day, not only for New Zealand but also for 11 other countries in the partnership," New Zealand PM John Key said as quoted by Antara news agency.

Tariff removals

Australia Trade Minister Andrew Tobb said that the TPP would remove 98 percent of tariffs for trade between the 12 countries. But the agreement has sparked heavy protests. In Auckland, 2,000 people closed down some streets to protest the agreement.

Law professor Jane Kelsey warned that the TPP would be utilized by US companies with histories of taking '€œdisturbing profits'€. From the labor side, the International Trade Union Confederation (ITUC) is against the TPP as it would decrease labor positions available.

"Foreign investors are provided with Investor-State Dispute Settlement tribunals. This could be used to attack minimum wage, public health, and environmental regulations that increase [a company'€™s] costs," Sharan Burrow, ITUC general secretary said.

Meanwhile, he continued, there had been only one international labor dispute submitted to a mechanism similar to TPP, and it has sat for eight years without any resolution.

An independent study conducted by Tufts University found that worker numbers would decline under the TPP, with 771,000 job losses in TPP countries as well as adverse impacts being felt by small and medium enterprises (SMEs). (ags)

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