Open AccessTRADE CREATION DAN TRADE DIVERSION ANTARA INDONESIA DAN NEGARA-NEGARA ASEAN-KOREA
Author(s) -
Tresna Ritaningsih,
Dedi Budiman Hakim,
Sahara Sahara
Publication year - 2018
Publication title -
jurnal ekonomi dan kebijakan pembangunan
Language(s) - English
Resource type - Journals
eISSN - 2686-2514
pISSN - 1979-5149
DOI - 10.29244/jekp.3.1.2014.64-81
Subject(s) - trade diversion , tariff , trade creation , international trade , international free trade agreement , trade barrier , economic integration , free trade , business , international economics , bilateral trade , commercial policy , economics , china , political science , law
Indonesia has several free trade agreements with trading partners that aimed to eliminate tariff and non tariff trade barriers. One of the free trade agreements is ASEAN-Korea FTA. Trade agreement in goods in ASEAN-Korea FTA was agreed since 2007 and now it is entering the implementation phase. The objective of this research is to determine whether the ASEAN-Korea FTA would increase the trade flows between Indonesia and ASEAN-Korea’ countries by analyzing the impact of regional integration on trade creation and trade diversion. This research is utilized balance panel data including 13 countries from 1998-2012. The empirical result shows that all Indonesia's trading sectors experienced decline because of trade diversion and trade creation does not occur. Indonesia's import trading with the non-member countries of ASEAN-Korea is 68% lower than the existing trading. Key word: trade creation, trade diversion, free trade agreement, trade in goods