Indonesia's commitments on services market liberalization under RCEP
RCEP is the only FTA in the world that applies both methods of scheduling commitments for the liberalization of trade in services, namely:
- The positive list approach: a member opens its services market to service suppliers of its partners only under the conditions, to the extent, and in the sectors specifically listed in its Schedule of Specific Commitments, set out in Annex II of the RCEP Agreement.
- The negative list approach: a member opens all of its services markets to service suppliers of its partners without limitation, except for the specific restrictions set out in its Schedule of Non-Conforming Measures, set out in Annex III of the RCEP Agreement.
RCEP allows member countries to choose whether to apply the positive list or negative list approach during the initial stage of RCEP implementation, referred to as the transitional period:
- Eight out of the 15 RCEP members chose to liberalize their services markets under the positive list approach during the transitional period, namely Cambodia, Laos, Myanmar, New Zealand, the Philippines, Thailand, China, and Vietnam.
The transitional period for members adopting the positive list approach is six years from the date RCEP enters into force, except for Cambodia, Laos, and Myanmar, which have a transitional period of 15 years.
- Seven out of the 15 members adopted the negative list approach from the outset, namely Australia, Brunei, South Korea, Indonesia, Malaysia, Japan, and Singapore.
Accordingly, Indonesia has committed to liberalize its services market under the negative list approach through Indonesia's Schedule of Non-Conforming Measures, which applies jointly to both services and investment and is set out in Annex III of the RCEP Agreement.
This Schedule lists all service sectors and subsectors in which Indonesia has reserved the right not to open its market, or not to open it fully, as otherwise required under the basic principles of RCEP services liberalization, meaning that the listed measures remain non-conforming with those principles.
For each reserved sector or subsector, the detailed contents of the limitation or reservation, including which basic principle of RCEP it departs from, the level of reservation, and the implementation schedule, if any, must be clearly specified. These are referred to as the non-conforming aspects.
Each country's Schedule of Non-Conforming Measures consists of two Lists, List A and List B, which differ in the way reservations are structured:
- For reservations set out in List A:
Scope of application: Reservations in this List apply only to existing measures affecting the service sectors and subsectors listed therein with respect to services and foreign service suppliers, or to future amendments to those existing measures.
Binding effect: For measures falling within this List, if a member later unilaterally amends the level of market opening, that amendment must comply with the ratchet principle, meaning that the market opening can only become broader and more favorable than before.
- For reservations set out in List B:
Reservations listed in this List may be maintained or adopted without being limited by the conditions that apply to List A.
Source: Center for WTO and International Trade - VCCI
The schedule of reservations and non-conforming measures for services and investment of Indonesia is attached below:
