Indonesia says hopes Britain stays in EU, looks for trade deal

BRUSSELS (Reuters) – The European Union has agreed to start free trade talks with Indonesia, EU Commission President Jean-Claude Juncker said on Thursday, as the growth-hungry bloc presses for improved economic ties with Asian countries.

Juncker said he and EU Trade Commissioner Cecilia Malmstrom made progress on Wednesday in discussions with Indonesian President Joko Widodo.

“We have concluded yesterday… preparatory discussions for a comprehensive economic partnership agreement and that’s good news both for Indonesia and the European Union,” Juncker told a joint news conference on Thursday.

The comprehensive economic partnership (CEPA), envisaged since 2011, would liberalise trade in goods and services and open up investment and procurement markets with the largest economy in the Association of South East Asia Nations (ASEAN).

The EU has reached free trade deals with Singapore, Vietnam and South Korea as it seeks to sign deals with the 10-member ASEAN on a country-by-country basis, a strategy that is strongly supported by Britain.

Widodo said he hoped Britain, which holds a referendum on EU membership on June 23, would remain part of the bloc. He also met British premier David Cameron this week.

Just as the United States has sought to shift its focus to Asia, the EU is also trying for a trade deal with Japan and is in talks to deepen investment ties with China, potentially a precursor to a free-trade accord.

Widido said a free trade deal would be in line with Indonesia’s policy to make its economy more open and competitive.

Indonesia mainly exports agricultural products, fuel, minerals, textiles and semi-manufactured goods to the 28-member bloc.

The EU’s main exports to Indonesia are high-tech machinery, transport equipment, manufacturing goods, chemicals and processed foods.

Trade in goods between the parties was some 24 billion euros (£19 billion) in 2014, compared with some 180 billion between the European Union and ASEAN as a whole.

The European Union had initially sought to negotiate a free trade deal with the entire ASEAN bloc, but broke off talks in 2009, launching separate negotiations instead.

It is set to hold a first round of talks with the Philippines in the first half of this year.

(Additional reporting by Julia Fioretti, Robin Emmott, Robert-Jan Bartunek, Philip Blenkinsop; editing by John Stonestreet)

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Malaysia’s GDP to exceed RM3.9 trillion by 2030, says study

KUALA LUMPUR: Malaysia, Indonesia, the Philippines and Thailand are expected to join the ranks of Asian nations with a gross domestic product (GDP) exceeding US$1 trillion (RM3.9 trillion) by 2030, according to a study by US-based global information company IHS Inc.

“This will help to increase the geopolitical and economic importance of Asean and economic grouping in international diplomacy and the global dialogue on trade, investment and international standards-setting,” said IHS chief economist for Asia-Pacific Rajiv Biswas.

In a statement on Thursday, IHS said South-East Asia was expected to be one of the world’s fastest growing regions with these four Asean nations.

Referring to Malaysia as Asia’s next advanced economy, the IHS report said Malaysia was forecast to achieve a per capita GDP of US$20,000 by 2025, with total GDP exceeding US$1 trillion by 2030.

Biswas pointed out that the structure of Malaysia’s economy would continue to shift towards higher value-added manufacturing and services.

“Strategic growth industries in the services sector will include financial services, healthcare, education, commercial aviation, tourism and the IT-business process outsourcing industry, as Malaysia becomes an increasingly important services, services-exporting economy for South-East Asia,” said Biswas.

Indonesia’s GDP is forecast to grow at 5% a year over 2016-2020, supported by strong growth in consumer demand and infrastructure investment, he added.

“By 2020, Indonesia will have already become a nation with a GDP size exceeding US$1 trillion, and by 2030, Indonesian GDP is projected to exceed US$3.7 trillion,” said Biswas, adding that Indonesia is South-East Asia’s largest economy and one of the world’s largest emerging markets.

The Philippines, he said, had shown rapid GDP growth averaging at around 6% per year over 2011-2015, with GDP growth of 5.8% per year forecast over 2016-2018.

“The total size of the Philippines’ economy is projected to grow from US$300 billion in 2016 to US$700 billion by 2025, and a US$1 trillion economy by 2030,” Biswas added.

Meanwhile, the Asean frontier markets of Vietnam, Myanmar, Cambodia and Laos are forecast to continue to grow rapidly.

The IHS study showed that Vietnam would grow at a pace of around 6.5% per year over the medium term, with rapid growth in manufacturing exports of electronics and garments driving industrial development.

“The new EU-Vietnam Free Trade Agreement and the planned TPP (Trans-Pacific Partnership) deal will significantly boost Vietnam’s market access to the EU and the US for its manufacturing exports by reducing tariff barriers substantially,” he added. — Bernama

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