(20 December 2012, Jakarta) LIPI hosts jointly a workshop with Chung-Hua Institution for Economic Research (CIER) on the feasibility study of Economic Cooperation Arrangement (ECA) between Indonesia and Taiwan in the Widya Graha LIPI, Jakarta. This workshop successfully concluded the joint team work of LIPI and CIER on the joint feasibility study of bilateral ECA between Indonesia and Taiwan. This feasibility study is followed by the collaborative work of ‘the dynamic and current status of Indonesia-Taiwan relations’ carried out in 2011.
Before the welcome remarks by Prof. Dr. Syamsuddin Haris (Head of Research Center for Politics, LIPI), Mr. Andrew Hsia (Taipei Economic and Trade Office Representative) briefed the current Indonesia-Taiwan bilateral relations and the prospects. Since his arrival at Jakarta three years ago, bilateral relations have been substantially extended. He trusted positive potentials for bilateral relations will be further enhanced with mutual efforts through the ECA.
The coordinators from both research teams presented and reflected the main points and findings of this joint study to encourage both Taiwan and Indonesia authorities to consider the policy options of a bilateral ECA and by a step-by-step ‘building-block approach’. Dr. Adriana Elisabeth (LIPI) and Chaw-Hsia Tu (CIER) illustrated the economic benefits of the ECA and concluded that Indonesia and Taiwan shall build deeper and closer economic cooperation based on the WTO principle.
In addition, Indonesia and Taiwan can expand their economic and trade relation by considering building blocks, so as to sustain the current dynamic economic cooperation. Last but not least, Dr. Adriana pointed out the significant role of national interests for the development of bilateral ECA.
Based on complementary economic nature in general between Indonesia and Taiwan, an ECA will not only increase trade and investment flows but will also reduce the trade barriers through increased cooperation in regulations such as technical barriers to trade (TBT), sanitary and phytosanitary measures (SPS), and trade facilitation. In addition, the ECA may also enhance economic development in Indonesia in various fields including SMEs, human resources, electronics and automotive industries and agriculture.
The simulations also confirmed the findings of this joint feasability study. In general, an ECA will increase bilateral trade flows and GDP and jobs are thereby created. In this regard, Taiwanese business has created over a million jobs in Indonesia and more job opportunities will be expected with investment flows through the ECA.
Distinguished discussants from academia, industrial associations and the public sectors in Indonesia and Taiwan were invited for this event. Mr. Leo Mualdy from Trade policy analysis & development agency, Ministry of Trade in Indonesia, Wisnu Wijaya Soedibjo, Deputy Director for Investment Bilateral Cooperation, Investment Coordinating Board (BKPM), Ambassador H.E. Ibrahim Yusuf of Indonesian Council on World Affairs, Mr. Sofjan Wanandi, Head of Indonesian Businessman Association (APINDO),and Professor Carunia Firdausy, a LIPI economist examined the prospects of the bilateral ECA from different perspectives. The rest of discussants reflected the viewpoints shared by the representatives from Office of Trade Negotiations, Ministry of Economic Affairs and Taiwan WTO Center, CIER.
This joint feasibility study of bilateral ECA shows that there are potential challenges and difficulties to be addressed for a possible comprehensive ECA between Indonesia and Taiwan. Having said that, a deeper and closer economic cooperation will be mutually beneficial and create a win-win situation for both sides. An ECA may be deemed as a mid-term to long-term goal, more realistically. Thus it is recommended that both Indonesia and Taiwan consider building blocks, including industrial cooperation, investment facilitation, capacity building and SME cooperation.
