[ad_1]
Indonesia’s parliament on Tuesday passed a law that cements the country’s membership in the China-backed Regional Comprehensive Economic Partnership (RCEP).RCEP), making it the latest Southeast Asian country to join the world’s largest trading bloc.
Lawmakers also approved a bilateral trade deal with South Korea, hoping to attract investment to develop the country’s electric vehicle and battery industries.
Indonesian Trade Minister Zulkifli Hassan said RCEP will boost trade, direct investment and increase the country’s gross domestic product by 0.07 percentage points.
“We describe this agreement as a fee-based way to enter the global market, and now is the time for Indonesia to hit the international market,” he told lawmakers.
RCEP is seen as an alternative to the US-led Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), covering nearly one-third of the world’s population and about 30% of GDP. It was initially agreed by the leaders of 15 Asia-Pacific countries in November 2020.
The RCEP initiative was launched by the Association of Southeast Asian Nations in 2012.
The agreement, which does not include the United States, came into effect on January 1 this year after seven countries in Southeast Asia, as well as Australia, China, Japan and New Zealand, ratified it last year.
According to the agreement with South Korea, Jakarta and Seoul will cancel more than 92% and 95% of tariff lines respectively. Indonesia will provide preferential tariffs to support South Korean investments in sectors such as automobiles and apparel, Indonesia’s trade ministry said in a statement after the 2020 deal was signed.
South Korean companies such as Hyundai Motor Group and LG Energy Solutions are currently among the major investors in Indonesia’s electric vehicle and battery industry as it looks to tap into its rich nickel reserves.
[ad_2]
Source link
