TPP: Indonesia's Biggest Challenge Is Its Government-Owned Enterprises

KUALA LUMPUR, Dec 4 (Bernama) -- Indonesia's biggest challenge in joining the Trans-Pacific Partnership (TPP) is its state-owned enterprises, which account for a substantial size of the country's economy. The mega trade pact is not SOE-friendly and hence, Indonesia needs to make some adjustments in that regards, said Indonesian Coordinating Minister of Economic Affairs Sofyan A Djalil. "Another issue is government procurement, which is one of the hottest issue discussed in the TPP," he told reporters on the sidelines of the 10th Asia Economic Summit here today. Indonesia, which has expressed interest to join the mega-trade pack, is currently studying the deal in detail, said Sofyan, adding that if the country wished to be more competitive, it should be allowed to have open market access for its products. "Currently, Indonesia already has the ASEAN Free Trade Agreement (AFTA) but if the republic wished to expand its markets further, it has to join the TPP. The AFTA is only in the region," he opined. The TPPA countries namely Australia, the United States, New Zealand, Canada, Mexico, Peru, Chile, Brunei, Singapore, Japan, Vietnam and Malaysia account for almost 40 per cent of the world's Gross Domestic Product and a third of global trade. In the challenging global environment, he said a country needed to be more robust in terms of opening up their market to investment opportunities in order to remain competitive. If Indonesia did not join the pact, Sofyan said Indonesia may become less competitive in terms of marketing its products globally, especially to TPP markets. Beside AFTA, Sofyan said Indonesia was in the midst of closing negotiations on the Regional Comprehensive Economic Partnership and had free trade agreements (FTAs) with Japan and China. Sofyan said the process of joining the pact may take about one or two years as Indonesia needed to prepare as well as make necessary adjustments to fit into the partnership. -- BERNAMA