Indonesia, Southeast Asia’s largest economy, will likely ratify its membership of the Regional Comprehensive Economic Partnership (RCEP) early next year, its chief economic minister said on Friday.
The China-backed RCEP, the world’s biggest trade bloc, is set to enter into force on Saturday, January 1, 2022, after seven nations in Southeast Asia, as well as Australia, China, Japan, New Zealand and South Korea ratified the pact earlier this year.
Details in the RCEP were agreed by leaders of 15 countries covering nearly a third of the global population and about 30 percent of its global gross domestic product (GDP) in November 2020.
Indonesia has been seeking parliamentary approval to ratify the agreement for months.
Chief economic minister Airlangga Hartarto said a parliamentary commission overseeing trade rules had approved the ratification and its endorsement will be brought to a wider parliamentary vote in the first quarter of 2022.
President Joko Widodo will sign off on the ratification after parliamentary approval, he added.
Indonesia will likely book a trade deficit with members of RCEP in the early period of its implementation, but by 2040, the pact could boost Jakarta’s trade surplus to $979.3 million, Airlangga said.
It will also increase the country’s GDP growth by 0.07 percentage points and raise exports and imports by $5 billion and $4 billion respectively, he said, citing a government analysis.
Indonesian rubber, steel, chemical, food, wood and mineral product exports are expected to grow under the deal, the minister said.