The government targets that Indonesian authorities can complete the ratification of the Regional Comprehensive Economic Partnership (RCEP) agreement in the first quarter of 2022. A number of benefits or funds for Indonesia will be achieved. Coordinating Minister for Economic Affairs Airlangga Hartarto explained that the RCEP trade agreement would bring various benefits. Among them are certainty and uniformity of trade rules, a more conducive investment climate, increased business opportunities for goods, services and investment.
As well as improving the quality of national services and strengthening regional value chains, covering additional elements in the RCEP agreement, expanding benefits (spill over effects), and having an impact on the macro economy.
"RCEP also has a significant role in the economy. RCEP has become a 56% export destination for Indonesia and a source of imports from Indonesia for 65%," explained Airlangga, Friday (12/31/2021).
Through this RCEP trade agreement, Indonesia will gradually be able to get funding. Airlangga detailed in terms of the trade balance and macroeconomic growth. In 2022, Indonesia's trade balance is estimated to have a surplus of US$ 256 million or equivalent to Rp 3.6 trillion.
In terms of trade in goods and services, it is predicted that service exports will increase in 2026 by US$ 4,748 million or approximately Rp 4.7 billion. And it is estimated that it will increase to US$ 979.3 million or equivalent to Rp. 13.9 trillion in 2040.
Meanwhile, if Indonesia does not participate in RCEP, the surplus will only increase to US$ 386.03 million or equivalent to Rp. 5.5 trillion in 2040. "There is an increase 2.5 times greater than not joining RCEP," explained Airlangga.
The export value is estimated to increase by US$ 5.01 billion or equivalent to Rp. 71 trillion (exchange rate of Rp. 14,200/US$) in 2040 and could decrease by US$ 228 million if it does not join the RCEP. Sectors that are expected to experience an increase in exports, said Airlangga, are gas, electronics, wood, manufacturing, plantations, and paper.
Meanwhile, the import value is believed to have increased by US$ 4.05 billion and could decrease by US$ 158 million if not joined. Sectors that experienced an increase in imports included processed food, transportation including motor vehicles and their equipment, metals, chemicals, processed rubber, plastics, as well as textiles and garments.
Then from a macroeconomic perspective, the RCEP agreement will increase gross domestic product (GDP) by 0.07% in 2040. On the other hand, the GDP figure will fall by 0.08% if Indonesia does not join.
"Indonesia will experience an increase in GDP by 0.07%, an increase in exports of US $ 5 billion in 2040. So with this study, it is positive for the national economy," explained Airlangga.
It is known that RCEP members consist of 10 ASEAN countries and five non-ASEAN trading partner countries namely Japan, Australia, South Korea, New Zealand, and China.
Airlangga noted that the trade surplus with the five trading partner countries in the next five years is believed to increase. His side noted that the trade surplus if Indonesia did not participate in the RCEP would reach US$4.745 billion in 2026. However, this value could increase to US$4.748 billion.
"This means that there is a potential increase in the margin from exports in 2026 by US$ 3.01 million US dollars or 0.06% in 2026 with the five countries," he said.
Airlangga emphasized that RCEP is not only a commitment to a free trade agreement (FTA). It also regulates several important matters, such as the elimination of the substance of barriers to trade in services so that market access is more open.
Other important things regulated in the RCEP, said Airlangga, include encouraging and creating a conducive e-commerce electronic commerce ecosystem.
The RCEP agreement also has an impact on reducing the development gap among RCEP member countries by working together to empower technical and economic cooperation.
Then it can also promote various information and cooperation in increasing the ability of MSMEs to take advantage of the RCEP agreement, as well as increasing the capacity of MSMEs, especially in digital access and entering the global and regional supply chain.
Airlangga hopes that this RCEP can increase Indonesia's competitiveness, as well as encourage and open export markets.
"For the people of Indonesia, it is hoped that this RCEP agreement can be used by various ministries, industries, and other business actors," explained Airlangga.