Participating in the Trans-Pacific Partnership (TPP) trade pact could harm more than benefit Indonesia as the deal would demand a far greater degree of economic liberalization in the country in contrast with most of the country's current policy framework, analysts have warned.



Djisman Simandjuntak, a senior economist with the Centre for Strategic and International Studies (CSIS), said that many points included in the TPP were not in line with the government's current policies, such as the pact's requirement of equal treatment for local and foreign investors.



'We [currently] have investment policies that are generally against that. For example, the negative investment list,' he said on Wednesday.



According to Djisman, the government would have to revise a lot of regulations and policies if it were to sign the US-led trade deal. Among those that would need revising were regulations on investment, labor, trade and intellectual property rights.



The TPP would also provide more extensive rights for companies to establish a panel to sue governments if they believed that a policy had unfairly harmed their business, Djisman said.



Separately, Mahmud Syaltout, an international trade law and policy expert with the University of Indonesia (UI), said that joining the TPP could be suicidal for Indonesia.



'The TPP should be called the 'World Trade Organization plus' for its tendency for further liberalization. I think it's a tool for developed countries to get out of their economic crises,' he said.



On the one hand, Mahmud noted that joining the TPP would provide Indonesian consumers with more affordable quality goods because trade tariffs among participating parties would be set at 0 percent. That would be very beneficial for countries that solely focused on consumption to propel their economic growth, he argued.



'However, let's not forget that if we want to become a developed nation, boosting domestic production is a must,' Mahmud said.



Mahmud said that local agricultural and financial industries could become Indonesia's most fragile sectors competing against similar products from overseas if the government jumped onto the TPP bandwagon.



In the financial sector, for example, foreign banks would be treated equally alongside Indonesia's state-owned lenders under the trade pact scheme.



Voicing a similar view, Djisman said that the TPP would remove any special treatment for state-controlled enterprises.



Deputy State-Owned Enterprises Minister Fajar Harry Sampurno said, however, that his ministry did not have any problem with equal treatment for state-owned companies and private firms.



In fact, state enterprises and private companies had always been treated equally, he went on to say.



The TPP, which currently comprises 12 countries with a total population of 808.7 million and a combined gross domestic products (GDP) of US$27.8 trillion, has sparked debate around the world about the pros and cons of the deal and the highly secretive nature of the negotiations.



On Monday, President Joko 'Jokowi' Widodo expressed Indonesia's intention of joining the trade pact after a White House meeting in Washington, DC.



The Indonesian Textile Association (API) and the Indonesian Footwear Association (Aprisindo) previously asked the government to join the TPP in order to make local textile products more competitive against those of Vietnam, which is a TPP-participating country.



Indonesian Chamber of Commerce and Industry (Kadin) chairman Suryo Bambang Sulisto and Indonesian Employers Association (Apindo) member Shinta Widjaja Kamdani said, meanwhile, that the government had to thoroughly review both the benefits and costs of the trade deal before joining the pact. (fsu)

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