The China-backed trade bloc – the world’s largest – is set to go into effect on January 1.
Indonesia’s top economy minister said on Friday that Indonesia, Southeast Asia’s largest economy, will likely certify its membership in the Regional Comprehensive Economic Partnership (RCEP) early next year.
The RCEP backed by China, the world’s largest trading bloc, is set to enter into force on Saturday, January 1, 2022, after seven Southeast Asian countries, as well as Australia, China, Japan, New Zealand and South Korea ratify the agreement. earlier this year.
Details were agreed at the RCEP by leaders of 15 countries covering nearly a third of the world’s population and about 30 percent of global gross domestic product (GDP) in November 2020.
Indonesia has been seeking for months to obtain parliamentary approval to ratify the agreement.
Chief Economy Minister Erlanga Hartarto said a parliamentary committee overseeing trade rules has agreed to ratify and its approval will be put to a broader parliamentary vote in the first quarter of 2022.
He added that President Joko Widodo would sign the ratification after Parliament’s approval.
Indonesia is likely to run a trade deficit with RCEP members in the early period of its implementation, but by 2040, the deal could boost Jakarta’s trade surplus to $979.3 million, Erlanga said.
It would also increase the country’s GDP growth by 0.07 percentage points and raise exports and imports by $5 billion and $4 billion, he said, citing a government analysis, respectively.
The minister said Indonesia’s exports of rubber, steel, chemicals, food, timber and metal products are expected to grow under the agreement.