The 12-nation Pacific trade agreement that was recently completed by negotiators – though not yet approved by all of the countries' governments – may have a 13th member within the next two years.
On Oct. 26, the president of Indonesia – Southeast Asia's largest economy – Joko Widodo, met with U.S. President Barack Obama, and told reporters afterward that he would decide whether his country would join the Trans-Pacific Partnership (TPP). Indonesia's participation in the trade agreement would certainly be a boon for Widodo's country, as well as the U.S., and the prospect seems to have support. Bloomberg's editorial board on Oct. 25 published an editorial headlined "Indonesia Needs to Join TPP." And Widodo himself seems to feel similarly.
"We are the largest economy in Southeast Asia," he explained to Reuters through a translator. "And Indonesia intends to join the TPP."
Large trade agreement would grow substantially if Indonesia joins
Indonesia would have to make some changes before it actually joins the free trade agreement, such as removing certain import and export restrictions, changing packaging requirements and improving intellectual property rights, Michael Froman, the U.S. trade minister, explained to the news outlet. However, if these standards are met, it seems parties in both the U.S. and Indonesia expect the TPP to grow to 13 countries within a couple years.
"Indonesia's $1 trillion economy would bolster the strength of the TPP."
"I'm a businessman," Widodo explained in reference to his time as a furniture exporter, according to The New York Times. "I know what they want. I know what they need. I want to say that Indonesia is open for investment. Indonesia is open for investors."
The TPP already comprises around two-fifths of the world's economy, and Indonesia's $1 trillion economy would certainly bolster the strength of the agreement, according to the newspaper. Thomas Lembong, the Indonesian trade minister, explained to the news source his concern that should the country remain outside the trade pact, it could fall behind neighbors such as Vietnam, Australia, Brunei, Malaysia and Singapore – all TPP members.
Opposition to Indonesian presence in the TPP
However, there are concerns about Indonesia joining the free trade deal, both in the U.S. and in the Southeast Asian country. Some lawmakers in Indonesia have expressed their opposition to the agreement, while in the U.S., there are concerns about corruption, the judicial system and the slow approval of business permits.
"There's going to be a lot of questions from the business community about the business climate here," said Robert Blake Jr., the American ambassador to Indonesia, according to The New York Times.
While Indonesia's entrance into the TPP isn't a guarantee, and certainly faces opposition, the move also has the support of powerful people in both countries. The next two years will tell whether the 12-nation deal grows to include 13.