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Politics

Indonesia intends to join TPP in trade policy shift

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Indonesian President Joko Widodo, left, and U.S. President Barack Obama shake hands after their meeting at the White House on Oct. 26.   © Reuters

WASHINGTON/JAKARTA -- Indonesia intends to join the Trans-Pacific Partnership free trade pact, according to President Joko Widodo, who announced the decision after his meeting with U.S. President Barack Obama at the White House on Oct. 26. The news signaled a turnaround of Indonesia's trade policy, which has focused on forming the Regional Comprehensive Economic Partnership among 16 Pacific Rim countries including China. If Indonesia does join the TPP, it is likely to change the regional trade landscape.

     Twelve Asia-Pacific countries reached a broad agreement on the TPP on Oct. 5. Widodo emphasized the significance of Indonesia's participation, saying, "Indonesia is an open economy. We are the largest economy in Southeast Asia, and Indonesia intends to join the TPP." 

     He was apparently concerned that being excluded from the TPP would lead to economic isolation in Asia and a decline in corporate investment. But to join the free trade framework, Indonesia needs to meet high standards such as lowering tariffs and improving trade and labor rules. A presidential spokesperson said discussions on whether to join the TPP will now begin.

     South Korean President Park Geun-hye also expressed willingness to have her country join the TPP when she had talks with Obama on Oct. 16 in Washington. Obama said TPP members, not countries like China, should write the rules of the global economy. He hopes to form closer cooperation with South Korea, Indonesia and other Asian countries to contain China.

     Obama is scheduled to make a Southeast Asian tour in late November to hold summit meetings with leaders from the Asia Pacific Economic Cooperation forum and Association of Southeast Asian Nations members. He is expected to urge the Philippines and Thailand to join the TPP as well.

     In their joint statement after the Oct. 26 meeting, Obama and Widodo expressed shared concern about recent developments in the South China Sea. They urged all parties to refrain from actions that raise tensions in the area and affirmed the importance of ensuring freedom of navigation.

     Indonesia does not have a territorial dispute with China over the Spratly Islands and has kept a neutral stance regarding China's construction of artificial islands there.

     Obama and Widodo also agreed that their countries will cooperate in maritime security, climate change and energy issues. The U.S. will help Indonesia's plans to use more renewable energy sources and conserve forests, which absorb carbon dioxide.

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