Thu. Jan 27th, 2022

The China-backed trading bloc – the world’s largest – is expected to take effect on January 1.

Indonesia, Southeast Asia’s largest economy, is likely to 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 largest trading bloc, will 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 agreement earlier this year.

Details in the RCEP were agreed by leaders from 15 countries covering almost a third of the world population and about 30 percent of its global gross domestic product (GDP) by November 2020.

Indonesia has been seeking parliamentary approval for months to ratify the agreement.

Chief Minister of Economic Affairs Airlangga Hartarto said a parliamentary commission overseeing trade rules approved the ratification and its ratification will be brought to a wider parliamentary vote in the first quarter of 2022.

President Joko Widodo will sign the ratification after parliamentary approval, he added.

Indonesia is likely to discuss a trade deficit with RCEP members in the early period of its implementation, but by 2040, the deal could increase 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 increase exports and imports by $ 5 billion and $ 4 billion respectively, he said, citing a government analysis.

Exports of Indonesian rubber, steel, chemical, food, wood and mineral products are expected to grow under the agreement, the minister said.

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