The impact of Asean-China Free Trade Area (ACFTA) agreement on Indonesia’s major plantation export commodities
Abstract
This study aims to analyze the impact of ASEAN-China Free Trade Area (ACFTA) on the 4 major exports of plantation commodities (including the commodities of coffee, cocoa, rubber, and palm oil) in Indonesia. The trade impact is measured based on the occurrence of trade creation or trade diversion. The negative coefficient as the result of dummy FTA (Free Trade Area) measurement indicates the presence of trade diversion. Meanwhile, the positive coefficient indicates the presence of trade creation. This study examines the export of major plantation commodities of Indonesia to China and compared with the 10 major export destination countries worldwide. The findings show that trade creation exists within the commodities of coffee, rubber, and palm oil while the trade diversion exists in the commodity of cocoa.
Keyword : ACFTA, trade creation, trade diversion, dummy FTA
How to Cite
Darmanto, E. B., Handoyo, R. D., & Wibowo, W. (2021). The impact of Asean-China Free Trade Area (ACFTA) agreement on Indonesia’s major plantation export commodities. Business: Theory and Practice, 22(1), 91-97. https://doi.org/10.3846/btp.2021.11012
This work is licensed under a Creative Commons Attribution 4.0 International License.
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Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58(2), 1071−1086. http://people.stern.nyu.edu/wgreene/Econometrics/Arellano-Bond.pdf
Ariana, D. S. (2014). Trade Creation & Trade Diversion ASEAN Korea Free Trade Area: Studi Kasus Ekspor Indonesia Periode 2007–2012. Departemen Ilmu Ekonomi FEB UNAIR.
ASEAN Statistical Yearbook. (2018). ASEAN Statistical Yearbook. The ASEAN Secretariat. https://asean.org/storage/2018/12/asyb-2018.pdf
Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115−143. https://doi.org/10.1016/S0304-4076(98)00009-8
Budhiman, I. (2018). Indeks Logistik Indonesia Naik, tapi Biaya Logistik masih Tinggi. Dapat diakses pada. https://ekonomi.bisnis.com/read/20180725/98/820509/indeks-logistik-indonesia-naik-tapi-biaya-logistik-masih-tinggi
Darhyati, A. T., & Rifin, A. (2017). Impact of non tariff measure on Indonesian cocoa exports. International Journal of Agriculture System, 5(2), 175–184. https://doi.org/10.20956/ijas.v5i2.1191
Darmawan, A., & Nuryanti, S. (2011). Analisis Dampak AFTA & Kebijakan Perdagangan Kakao di Pasar Domestik & China. Analisis Kebijakan Perkebunan, 9, 143–156. https://doi.org/10.21082/akp.v9n2.2011.143-156
Dee, P., & Findlay, C. (2006). Trade facilitation: what, why, how, where and when? Working paper, Asian Development Bank, Manila.
Esposito, P. (2016). Trade creation, trade diversion and imbalances in the EMU. Economic Modelling, 60(c), 462−472. http://iranarze.ir/wp-content/uploads/2017/01/E3442.pdf
Gani, A. (2017). The logistics performance effect in international trade. The Asian Journal of Shipping and Logistics, 33(4), 279–288. https://doi.org/10.1016/j.ajsl.2017.12.012
Hapsari, I. M., & Mangunsong, C. (2006). Determinants of ACFTA Members’ trade flows and potential for trade diversion. Asia-Pacific Research and Training Network on Trade Working Paper Series, 7(1), 53−59. https://ideas.repec.org/p/esc/wpaper/2106.html
Herleni. (2018). Analisis Trade Creation & Trade Diversion Produk Industri Kreatif Fesyen Indonesia 2007−2016 Pasca Asean–China Free Trade Area & 30 Negara Pangsa Fesyen Terbesar Dunia. Fakultas Ekonomi & Bisnis. Universitas Airlangga.
Ikhsan, S., Anindita, R., Hanani, N., & Koestiono, D. (2016). The change in world price and export tax of crude palm oil and their impact on the economy and welfare. RJOAS, 4(52) (April). https://doi.org/10.18551/rjoas.2016-04.05
International Trade Center. (2018). Data Ekspor. http://www.intracen.org/itc/market-info-tools/statistics-export-country-product-monthly/
International Trade Center. (2020). Data Ekspor. https://www.trademap.org/Country_SelProductCountry
Junko, S. (2015). Abenomics, yen depreciation, trade deficit, and export competitiveness. In RIETI Discussion Paper. https://www.rieti.go.jp/jp/publications/dp/15e020.pdf
Karagoz, K. (2016). Determining factors of Turkey’s export performance: an empirical analysis. Procedia Economics and Finance, 38, 446–457. https://doi.org/10.1016/S2212-5671(16)30216-7
Karemera, D., Koo, W., Smalls, G., & Whiteside, L. (2015). Trade creation, diversion effects and exchange rate volatility in the global meat trade. Journal of Economic Integration, 30(2), 240–268. https://doi.org/10.11130/jei.2015.30.2.240
Kumar, D. (2014). Correlations, return and volatility spillovers in Indian exchange rate. Global Business Review, 15(1), 77–91. https://journals.sagepub.com/doi/10.1177/0972150913515577
Linder, S. B. (1961). An essay on trade and transformation. John Wiley and Sons.
Nayantakaningtyas, J. S., & Daryanto, H. K. (2012). Daya Saing & Strategi Pengembangan Minyak Sawit di Indonesia. Jurnal Manajemen & Agribisnis, 9(3), 194–201. https://journal.ipb.ac.id/index.php/jmagr/article/view/7893/6194
Nielsen, B. H. (2005). Generalized Method of Moments (GMM) estimation. In Econometrics. Department of Economics University of Copenhagen, Copenhagen.
Okabe, M. (2014). The impact of AFTA on intra-AFTA trade. Journal of Asian Economics, 35, 12–31. https://doi.org/10.1016/j.asieco.2014.09.004
Rose, A. K., & Yellen, J. L. (1989). Is there a J-curve? Journal of Monetary Economics, 24(1), 53–68. https://doi.org/10.1016/0304-3932(89)90016-0
Sukma, A. (2014). Trade creation & trade diversion Asean-Korea free trade area: Studi Kasus Ekspor Indonesia Periode 2007−2012. Faculty of economic, University Airlangga.
Szalanczi, A., & Trinh, M. (2017). Trade creation and trade diversion effects of ASEAN−Japan Comprehensive Economic Partnership (AJCEP). Lund University, ID 8925019. https://lup.lub.lu.se/student-papers/search/publication/8925019
Tampubolon, J., Ginting, A., Nainggolan, H. L., & Aritonang, J. (2017). North Sumatra’s export performance and competitive advantages in the implementation of ASEAN Economic Community (AEC). International Journal of Advance Agricultural Research, 5, 61–65. http://www.bluepenjournals.org/ijaar/pdf/2017/August/Tampubolon_et_al.pdf
Thom, T. X. (2017). Exchange rate, trade balance, and the J-Curve effect in Vietnam. Asian Economic and Financial Review, 7(9), 858–868. https://doi.org/10.18488/journal.aefr.2017.79.858.868
Viner, J. (1950). The Customs Union issue. Carnegie Endowment for International Peace.
Wagner, J. (2001). A note on form size: export bahaviour relationship. Small Business Economics, 17, 229–237. https://doi.org/10.1023/A:1012202405889
Widyasanti, A. A. (2010). Perdagangan Bebas Regional & Daya Saing Ekspor: Kasus Indonesia. Buletin Ekonomi Moneter & Perbankan, 13(10), 5–22. https://doi.org/10.21098/bemp.v13i1.251
Yang, S., & Martinez, Z. I. (2014). A Panel data gravity analysis of trade creation and diversion effects. China Economic Review, 29(Iso 690), 138. https://doi.org/10.1016/j.chieco.2014.04.002
Yang, S., & Martinez, Z. I. (2014). China economic review: A panel data analysis of trade creation and trade diversion effects: The case of ASEAN–China Free Trade Area. China Economic Review, 29, 138–151. https://doi.org/10.1016/j.chieco.2014.04.002