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The Impact Of ACFTA Implementation On International Trade Of Indonesia

Author

Listed:
  • Ibrahim

    (Bank Indonesia)

  • Meily Ika Permata

    (Bank Indonesia)

  • Wahyu Ari Wibowo

    (Bank Indonesia)

Abstract

This study analyze the impact of the implementation of trade agreements within the framework of ACFTA on Indonesia»s export by using the GTAP model; a Multi Regional Computable General Equilibrium Model. Results shows that ACFTA provide opportunities for increased export from Indonesia; Indonesia obtained a net trade creation of international trade amounted to 2% and total exports growth increased by 1.8. However, the export performance of Indonesia in the period showed a decrease of competitiveness, as shown by the decline in share of Indonesian export commodities which are highly competitive and high intra-industry linkage. This paper also find that because the commodity structure of China and the non compeeting behavior of ASEAN countries including Indonesia (tends to complement), China is relatively easier to penetrate export to the ASEAN market. The entering products from China should provide opportunities for domestic producers to increase production capacity in ASEAN, due to wider choice of relatively cheap capital goods imports.

Suggested Citation

  • Ibrahim & Meily Ika Permata & Wahyu Ari Wibowo, 2010. "The Impact Of ACFTA Implementation On International Trade Of Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 13(1), pages 23-56, July.
    • Handle: RePEc:idn:journl:v:13:y:2010:i:1f:p:23-56
    DOI: https://doi.org/10.21098/bemp.v13i1.384
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    More about this item

    Keywords

    ACFTA; trade; export; GTAP; Revealed Comparative Advantage; CGE;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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