A Research On Indonesia’s Strategic Choice Of Economic And Trade Cooperation In Asia-Pacific

At present,the Asia-Pacific regional economic and trade cooperation presents a "multi-channel coexistence,competitive cooperation" features that TPP(formerly dominated by the United States),ASEAN-led RCEP and MSR(Maritime Silk Road)put forward by China are the most representative.Indonesia as ASEAN’s largest economy and the leader of ASEAN,which is the seat of the ASEAN Secretariat in,plays the ASEAN "chief" for a long time.Therefore,based on the ASEAN perspective,this paper analyzes the current situation of Asia-Pacific economic and trade cooperation and its competitive landscape,examines Indonesia’s economic and trade development and cooperation status quo and analyzes movements of Indonesian participation in regional economic integration,and then uses GTAP-CGE model to simulate the welfare situation of Indonesian participation in Asia-Pacific economic and trade cooperation(by adding one or several organizations),and finally comes to the basic conclusion on Indonesian strategic choice of economic and trade cooperation in Asia-Pacific.In the theoretical analysis part,the paper combines the status quo and the competitive situation of economic and trade cooperation in Asia-Pacific to comprehensively analyses the main motivating factors and restraining factors.For Indonesia joining TPP,the main 3 motivating factors are as follow:(1)demonstration effect of 4 countries in ASEAN participation in TPP;(2)intimacy between 4 countries in ASEAN and the USA;(3)dilemma in APEC.The main restraining factors are:(1)cautious comments in domestic Indonesia;(2)a weaker product competitiveness;(3)the high criteria and standard of TPP.For joining MSR,the views of all walks of life in domestic Indonesia are not consistent,including agreement and opposition.The main motivating factors are:(1)friendly bilateral relationship between Indonesia and China;(2)the need for Indonesian infrastructure construction;(3)the need for industrial structure optimization.The main restraining factors are:(1)unstable political environment in domestic Indonesia;(2)the effect of balancing-great countries strategy;(3)the maritime dispute between Indonesia and China.ASEAN lead RCEP,that is the first direction for Indonesian diplomatic and economic trade cooperation.so the RCEP accords with the need of Indonesian development and Indonesia will promote the establishment of RCEP positively to maintain the “central position” of ASEAN in Asia-Pacific.In the empirical study part,this paper uses GTAP9.0 to simulate five situations:(1)TPP is constructed while RCEP and MSR are not;(2)TPP is constructed and Indonesia joins TPP(RCEP and MSR are not constructed);(3)TPP and RCEP are constructed and Indonesia joins TPP(we tacitly approve the construction of RCEP means Indonesia is a member of it);(4)TPP and RCEP are constructed and Indonesia doesn’t join TPP;(5)TPP,MSR and RCEP are constructed and Indonesia joins the the MSR instead of TPP.The paper makes the status quo that TPP,RCEP and MSR are all not constructed as the baseline situation,and compares five simulated situations with the baseline situation.In the simulation results,the paper selects several macro-indexes of economic welfare,trade balance,terms of trade,import and export growth rate,GDP growth rate and real GDP increment and several micro-indexes of the trade gap in each industry,output rate and the change rate of import and export to make specific analysis.From the macro level,Although Indonesia has increased its social welfare after joining TPP,RCEP has a greater impact on its welfare,RCEP has a greater effect and a more obvious positive earnings,and for participation in MSR,it owns more welfare increase than TPP.Indonesian GDP increase rate and real GDP increment all show that RCEP is more conducive to Indonesian economy while the growth effect for joining TPP is not apparent and joining MSR owns a better economy growth performance.Indonesia’s trading conditions only slightly improvement after join in TPP,significantly improvement after RCEP establishment,more significant after adding MSR.In addition,the construction of RCEP can largely increase Indonesian import and export,and joining MSR is 50% larger import and export increase than joining TPP.From these changes of macro-index,though Indonesian joining TPP can have certain benifit,the overall welfare is not high.From the micro level,the biggest beneficiary for Indonesian joining TPP is texture and clothing industry.After joining TPP,Indonesia increases a lot in export,volume of trade favorable balance is enlarged too;other industries experience different degree of shocks,especially agriculture and electromechanical device.For joining RCEP and MSR,processed food and drink industry is the most profitable which output growth rate and export rate increases a lot.In addition,Indonesian extractive industry and electromechanical device all gain increase,and output growth rate of agriculture comes to a head.In general,Indonesian joining RCEP,TPP and MSR all have a certain effect on each industry,by comparison,RCEP and MSR have a more conducive comprehensive influence.Theoretical and empirical analysis present that:(1)currently Indonesia is not proper for joining TPP which has more benefits than disadvantages;(2)Indonesia itself as the member on RCEP,and benifit a lot from it so Indonesia should actively promote the establishment of RCEP;(3)MSR meet a better Indonesia’s development aspirations than TPP and brings more positive effects,joining MSR can be helpful to Indonesian dream of maritime powerful country.