For Indonesia : Actually, TPP is An Economic Cooperation Trap

 

By : Toni Ervianto, Master Graduated from University of Indonesia

An analyst has said Indonesia should give more attention to the Trans-Pacific Partnership (TPP), a US-led free trade agreement between 12 countries in the Asia-Pacific region that was signed last October and has entered the ratification process in legislative bodies of its member countries.

“TPP has been agreed and is being ratified by its member countries,” HSBC senior trade economist Douglas Lippoldt told thejakartapost.com in Jakarta on Friday. He pointed to ongoing negotiations on the Regional Comprehensive Economic Partnership (RCEP). Touted as the largest free-trade area in the world, RCEP, which comprises the 10 ASEAN member countries as well as Australia, China, India, Japan, South Korea and New Zealand, would integrate all of ASEAN’s existing free-trade agreements into one scheme.

In the RCEP, Lippoldt said, Indonesia might have a stronger bargaining position; however, the partnership had not yet been finalized. Discussed since 2011, RCEP talks would enter their 12th round, scheduled to be held in Perth, Australia, in April. "We know the RCEP aims to remove tariffs and integrate service sectors, but we don't know exactly where all of this will head. We can see that in the TPP, 80 percent of subjects of duty will be liberalized,” Lippoldt said.

Both RCEP and TPP have member countries that together represent more than 25 percent of global trade. In terms of gross domestic product (GDP), the TPP’s 12 member countries generate US$27 trillion, while the 16 members of RCEP have a combined GDP of $22 trillion.

"RCEP is important in globalization. Indonesia wants to improve trade access to countries across Asia. Indonesian producers want to find input from areas across Asia. However, they may not be able to go further than what TPP can [provide]," Lippoldt said.

There has been growing concern of tighter trade competition between Indonesia and other Southeast Asian countries, especially Thailand, the Philippines and Vietnam, since economic conditions and the export structure of those three countries are quite similar to Indonesia’s. "If, once TPP takes effect, Indonesian exports will face competition from TPP member countries, the economic benefits expected to come will be substantially larger," Lippoldt said.

As it did not include China, he said, the TPP trading scheme would not be focused on commodities. Thus, Indonesia would get the chance to develop more value-added non-oil and gas exports in TPP. "TPP is more ambitious and will help Indonesia to liberalize further and to diversify its natural resources," Lippoldt said (http://www.thejakartapost.com/news/2016/03/20/indonesia-should-pay-more-attention-tpp-analyst.html#sthash.JZDsLej4.dpuf).

I think HSBC senior trade economist Douglas Lippoldt opini has representated United State’s purpose to engage Indonesia to join at TPP. And as we know, basically TPP is an economic scenario global for US and their allies to robb Indonesia’s wealth especially our natural resources.

Indonesia must alert on an economic rivalry between US and Chinese and US might be worried that recently Indonesia’s economic policy under Jokowi’s administration didn’t want remote control by major powers economic state, because Jokowi has a dream Indonesia will reincarnate as a main global economic players if all of stakeholders in Indonesia want to unite.

According to Hendrajit and Ferdiansyah Ali on their article “The Damage Potential of TPP and TiSA Bigger Than WTO and NAFA” said that United States and the European Union assumed after the end of the Cold War in the early 1990s, there has only been one monopolar. This is what  underlies the entire political-economic policy of the US and EU to take control of countries in the Asia Pacific region. So on the basis of their initiative, there was formed a secret of some countries to take control of  global trade under the umbrella the Trans-Pacific Partnership (TPP) led by the US and has the potential to disturb the cohesiveness of APEC (Asia Pacific Economic Cooperation), which consists of 24 countries. But on July 2, 2015, Wikileaks revealed some important facts about some secret agreements between countries in the Trade in Services Agreement (TiSA) led by the US and the European Union. According to data released by Wikileaks, until now there have been some 23 countries already in negotiations such as Australia, Canada, Chile, Taiwan, Colombia, Costa Rica, Hong Kong, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Switzerland, Pakistan, Panama, Uruguay, Paraguay, Peru, South Korea, Turkey, the United States and the European Union (representing 28 countries, including the UK).

Of the 17 important documents of the TiSA scheme which is currently still in confidential and closed negotiations, the documents suggest several important agreements to remove barriers to trade in services between countries. Wikileaks writes: "While the proposed Trans Pacific Partnerhship (TPP) and the Transatlantic Trade and Investment Pact (TTIP) have Become well known in recent months, the TiSA is the largest component of the United States strategic neoliberal trade treaty triumvirate. Together, the three treaties form not only a new legal order shaped for transnational corporations, but a new economic grand enclosure, which excludes China and all other BRICS countries."

Inevitably TiSA is a strategic component of the US neoliberal economic schemes against different countries. So both TiSA and the TPP are likely the agreements having damage potential bigger than the WTO and NAFTA.

In its report titled TiSA versus Public Services, Public Services International, an international organization of public workers' union federation that consists of some 20 million public employees spread across 154 countries, among others, wrote: "Current treaties have developed into constitutional-style documents that tie governments' hads in many areas only loosely related to trade. These include patent protections for drugs, local government purchasing, foreign investors' rights, public services and public interest regulation, the which can have consequences in areas such as labor, the environment and Internet Freedom."

 Economic Trap

             Actually, for Indonesia the existence of Trans Pasific Partnership (TPP) is an economic cooperation trap. Why ? First, in the global economic condition is representated with an economic rivalry between some of countries such as United States, Chinese, European Union, Japan, India, Brazil and Russia. They was built an economic cooperation scheme such as TPP which is controlled by USA and their allies, WTO which is controlled by USA and European Union, NAFTA which is controlled by USA and Northern American State, ACFTA which is controlled by Chinese, BRICS which is built by Chinese, Brazil, Russia, India and South Africa. Every an economic cooperation scheme is targeted Indonesia and South East Asia countries and Africa’s countries because they have a huge natural resources specially in energy, food and fresh water.

            Second, Indonesia hadn’t been included yet since trade agreement consultation or premiarly meeting among them, so that Indonesia didn’t have a clear information and what is a hidden agenda behind TPP. Indonesia doesn’t worry about economic access barrier which is schemed by TPP if Indonesia doesn’t want to join it.

            Third, every countries have national interest. If Indonesia doesn’t has access in TPP state member’s, Indonesia could be constructed a bilateral economic cooperation. The bilateral economic cooperation doesn’t be regulated in TPP’s scheme. Indonesia’s economic potential is our attractiveness, and every countries know that. With its large domestic market, stable economic fundamentals and sustainable economic growth, Indonesia has reached the same economic standard of the so-called BRIC countries. Indonesia and the BRIC countries, which contributed more than 20 percent to the world economy, played an important role in coping with the global economic slowdown. These countries should, therefore, be able to maintain their economic growth so that the world would no longer rely on industrialized nations such as the US or European countries.

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