The Impact of Comprehensive and Progressive Trans-Pacific Partnership Free Trade Agreement on Indonesian Economy

Abstract

Islamic law is inclined toward free trade and condemned imposing tariffs on trade with other states. Even when tariffs were imposed, they were imposed based on reciprocity. The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) is a free trade agreement to realize tariff elimination. CPTPP was signed by 11 countries in Santiago, Chile, on March 8, 2018, and this renewed agreement attracted Indonesia to join. This study analyzes the possible impact of CPTPP implementation on the Indonesian economy using the Global Trade Analysis Project (GTAP) model. We conduct a simulation to evaluate the impact of CPTPP on the Indonesian economy. The results show that the implementation of CPTPP leads to an increase in the real GDP and welfare of Indonesia. Also, the study found that CPTPP is beneficial to members. These results generally justify the elimination of tariffs promoted by Islamic law.

China’s New Economic Model as a Mark of Re-globalization

“…It is true to note Chinese market dominance in the world as one of the characteristics of world globalization economy. Consequently, this Chinese globalization, reshaping its interest with other states which are considered as most leading competitive countries, has signaled as a new drive of market economy as re-globalization (Munandar, 2020).…”