Did Inter-Regional Trade Agreements Bring Mutual Benefits? An Empirical Scheme of Indonesian Commodity Exports in Asean-China Free Trade Area

Abstract

The purpose of the study was to determine the effect of ASEAN-China Free Trade Area (ACFTA) on Indonesia's leading export commodities to China, Hong Kong and ASEAN countries. The methodology used is the model used below is based on New Trade Theory, which involves Comparative Advantage determinants including the total size of the country's economy, similarities in economic size, and differences in relative endowment factors. From the intended purpose, the results of this study are that commodities experiencing the largest growth in exports to all countries in 2010 were commodities with codes: 15, 87, 29 and 40. Meanwhile, commodities with code: 87: Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof, and 27: Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes, were export commodities whose growth was relatively stable, while commodities with code 26: ores, slag and ash, actually declined, and the potential for Indonesian trade cooperation with ASEAN-4 is still wide open. This was marked by an increase in Indonesia's exports to ASEAN-4 in 2010.