Indonesia could lose US$20 billion of potential trade if it decided not
to join the Trans-Pacific Partnership (TPP) — a trade pact between the US and
11 other Pacific Rim countries, including Malaysia, Singapore, Brunei, Japan
and Vietnam.
At the opposite end, Indonesia could benefit from US$26 billion of trade
by participating in the pact.
A study conducted by the Australia Indonesia Partnership for Economic
Governance (AIPEG) also estimated that Indonesia would lose $306 million from
the trade market if it did not join the TPP, as a “trade diversion” from
Indonesia to neighboring TPP member countries, such as Vietnam, Brunei and
Malaysia.
The top three TPP contributors are Japan, the US and Vietnam.
If Indonesia joined the TPP bloc, the country’s exports to the US and
other TPP member countries would increase following the liberation of trade
tariffs, the Trade Ministry predicted. Currently, the average trade tariff to
the country is around 5 percent.
However, by joining the TPP, Indonesia's imports would increase by 3.8
percent, based on the ministry's estimations.
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