Gov't Says RCEP Ratification to Be Completed in Q1 2022

TheIndonesia.id - The Coordinating Ministry for Economic Affairs said Indonesia will likely finish the ratification of Regional Comprehensive Economic Partnership, or RCEP, in the first quarter of 2022.

Coordinating Minister for Economic Affairs Airlangga Hartarto said deliberation in the House of Representatives Commission VI, which oversees industry and investment affairs, has been completed, and the next process is planned to take place within Q1 next year.

And because Indonesia has yet to ratify the free trade agreement (FTA), its implementation in the country will have to be pushed back from the initial plan on January 1, 2022. Members of the House must first sign the bill and submit the draft to president before it becomes a law.

Seven out of 10 Asean countries that signed the agreement have completed ratification.

“The five partner states have also ratified the agreement, which are China, Japan, Australia, New Zealand, and South Korea,” Hartarto said on Friday, December 31, as reported by Antara.

The idea of RCEP was first introduced during Indonesia’s Asean chairmanship in 2011. After ongoing negotiations, it was signed in November 2020 during the virtual Asean summit.

Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, China, Japan, South Korea, Australia, and New Zealand signed the world’s largest trade bloc, while India decided not to sign after previously being involved in initial negotiations.

According to its official website, the trade bloc covers “a market of 2.2 billion people with a combined size of US$26.2 trillion or 30% of the world’s GDP”.

Previously, board member at Center Indonesian Policy Studies (CIPS) Donna Gultom said the FTA will be wasted on Indonesia if the government doesn’t immediately ratify it. However, she estimated Indonesia’s involvement in a partnership at this scale will help the development of national industries, and she predicted that benefits gained from RCEP may start being visible five years from ratification with 8-11 percent of potential increase from export and 18-22 percent from investment.

Subsequently, the increasing investment is expected to contribute to the creation and development of new industries, including value-added manufacturing, which won’t only reach RCEP countries but also global market at large.