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The Chinese-backed trade bloc, the world’s largest, will enter into force on January 1.
Indonesia, the largest economy in Southeast Asia, is likely to be ratified early next year by a member of the Comprehensive Regional Economic Partnership (RCEP), its chief economy minister said on Friday.
The China-sponsored RCEP, the world’s largest trading bloc, will enter into force on Saturday, January 1, 2022, after the seven nations of Southeast Asia, as well as Australia, China, Japan, New Zealand and South Korea ratified the treaty earlier this year.
The RCEP details were agreed in November 2020 by leaders in 15 countries, which accounted for nearly a third of the world’s population and about 30% of gross domestic product (GDP).
Indonesia has been seeking parliamentary approval to ratify the agreement for months.
Economy Minister Airlangga Hartarto said the parliamentary committee overseeing trade rules had approved the ratification and that its approval would lead to a wider parliamentary vote in the first quarter of 2022.
President Game Widodo will sign the ratification after it is approved by parliament, he added.
Indonesia is likely to have a trade deficit with RCEP members early in the implementation, but by 2040, the treaty could increase Jakarta’s trade surplus to $ 979.3 million, Airlangga said.
In addition, the country’s GDP growth will increase by 0.07 percentage points and exports and imports will rise by $ 5 billion and $ 4 billion, respectively, citing a government analysis, he said.
Exports of Indonesia’s rubber, steel, chemicals, food, timber and mineral products are expected to grow under the agreement.
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