Illustrative image (Photo: VNA)
Hanoi (VNA) – The Trans Pacific Partnership (TPP) deal could raise Indonesia’s exports by 2.9 billion USD, said Ahmad Shauki, senior advisor for economic and public policy at the Australia-Indonesia Partnership for Economic Governance (AIPEG).

The country could see a swell in imports, especially in machinery, steel and plastic, taking the trade surplus down from 3.1 billion USD to 2.2 billion USD after joining the TPP, the Jakarta Post quoted Ahmad Shauki as saying. However, Indonesia’s total trade will record significant progress.

According to Ahmad Shauki, Indonesia can unlock access to the TPP countries such as the US, Canada, Mexico and other Latin American nations, which will cut tariff barriers from 2-5 percent to zero.

He said that sectors benefiting most from the TPP deal are footwear and textiles with shipment growth of 22 percent and 18 percent, respectively, while shipments of palm oil, wood and rubber will not escalate considerably due to a fall in demand.

Meanwhile, Mohammad Faisal, director of the Centre of Reform of Economics (CORE) Indonesia warned that potential on trade growth will shift to Vietnam if Indonesia does not join the TPP.

During 2001-2015, Indonesia’s exports to the US remained stable with 6 percent growth. However, Vietnam’s shipments to the US in the period spiked 242 percent even before joining the TPP.

The tariffs imposed by the US on ASEAN nations’ products are similar but Indonesia has faced a number of challenges such as high transportation costs as well as rising fuel prices and labour costs without increased productivity.-VNA