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Jakarta Post

Plan to join Trans-Pacific group may face hurdles at House

  • Khoirul Amin

    The Jakarta Post

Jakarta | Sat, February 6 2016 | 05:02 pm

The government'€™s plan to join the US-led Trans-Pacific Partnership ( TPP ) trade deal in the next two or three years may face a bumpy road ahead because in order to do so, the government must first obtain approval from the House of Representatives to revise at least 12 laws related to the partnership'€™s ambitious demands.

House Commission VI chairman Achmad Hafisz Tohir said on Thursday that there would need to be at least 12 laws synchronized with TPP articles if Indonesia were to join the trade pact.

Among the laws were those on investment, state finances, state-owned enterprises, business competition and cooperatives, he said.

'€œWe want the government to tell us first what they have prepared and what their targets are. Only then can we decide if we will agree or not,'€ he said.

Hafisz said that one particular clause in the TPP text that his commission would scrutinize was related to fair competition between state-owned enterprises and private companies.

'€œCommission VI is an advisor and supervisor of state-owned companies. Will state firms that are tasked with securing the public interest have to be privatized and all their tenders opened up?'€ he asked, adding that his commission would oppose such a clause.

Under the '€œcompetition policy and state-owned enterprises'€ article in the TPP text, the member states have to give equal treatment to state enterprises and private companies, especially when state firms receive significant government backing to engage in commercial activities.

In a separate development, Industry Ministry director general for international industrial security and access development Achmad Sigit Dwiwahjono said that his ministry was particularly concerned about issues related to local content requirements, locally known as TKDN, in the TPP.

'€œThe TPP doesn'€™t want TKDN, but we want it. We need to find a way out for the matter,'€ he said.

In the first half of this year alone, House Commission VI will work on revising laws on business competition and state enterprises in a bid to provide clear guidance for business and to boost the country'€™s competitiveness in the region.

Discussions on revisions to law in the House usually take months or even years before eventually being approved.

Trade Minister Thomas Lembong said that Indonesia would be ready to join the partnership in the next two or three years after concluding its Indonesia-EU comprehensive economic partnership
agreement ( CEPA ).

He said that Indonesia still had time to review the TPP internally as the current 12 TPP member countries were still in the ratification process in their respective states.

The TPP'€™s 12 member countries, namely Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, US, Vietnam, effectively signed the treaty in New Zealand on Thursday.

The TPP has been both praised and criticized by the public and analysts, with some arguing that it will boost the members'€™ economies and others arguing that it will only benefit certain developed nations.

Thomas said previously that joining the TPP was inevitable for Indonesia because some of its direct competitors like Vietnam and Malaysia had already joined the partnership.

Quoting consulting firm O'€™Rourke Group Partners, LLC, the American Chamber of Commerce ( AmCham ) in Vietnam has stated that Vietnam'€™s share of the US apparel import market could go from 10 to 35 percent once the TPP was implemented.

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