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Trans-Pacific Partnership may help Indonesia out of China dependence
INDONESIA is being urged to consider joining the Trans-Pacific Partnership (TPP) agreement to reduce dependency on trade with China, as the agreement might attract advanced technology-based investors from the TPP member states to invest in Indonesia and develop the country's advanced industries.
Bank Central Asia (BCA) chief economist David Sumual told the Jakarta Post: "If we relied heavily on China, our exports will be mainly commodities, cheap low-value-added products with a lack of technology, but lots of environmental issues. We need the TPP to balance our trade."
Aside from that, developed countries in the TPP such as Japan and the US were leaving the labour intensive sectors in which Indonesia is good, such as in making garments, textiles and footwear.
However, Mr Sumual supported the government in not rushing to join the TPP and to create a special team to assess the costs and benefits.
"It is better to take a longer time before deciding, especially as Indonesia is not ready yet. But we should not take too long, or we may lose momentum," he said.
Also of concern were the new economic dynamics of TPP member Japan, where Abenomics has yet to revive the economy, reverse deflation, and has lost public confidence amid industrial losses and falling profits and massive layoffs among Japanese corporations.
The TPP is a trade agreement among 12 Pacific Rim countries signed this February in New Zealand after seven years' of negotiations.
Bank Central Asia (BCA) chief economist David Sumual told the Jakarta Post: "If we relied heavily on China, our exports will be mainly commodities, cheap low-value-added products with a lack of technology, but lots of environmental issues. We need the TPP to balance our trade."
Aside from that, developed countries in the TPP such as Japan and the US were leaving the labour intensive sectors in which Indonesia is good, such as in making garments, textiles and footwear.
However, Mr Sumual supported the government in not rushing to join the TPP and to create a special team to assess the costs and benefits.
"It is better to take a longer time before deciding, especially as Indonesia is not ready yet. But we should not take too long, or we may lose momentum," he said.
Also of concern were the new economic dynamics of TPP member Japan, where Abenomics has yet to revive the economy, reverse deflation, and has lost public confidence amid industrial losses and falling profits and massive layoffs among Japanese corporations.
The TPP is a trade agreement among 12 Pacific Rim countries signed this February in New Zealand after seven years' of negotiations.
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