Indonesia’s coffee and cocoa agribusiness opportunities in Regional Comprehensive Economic Partnership trade cooperation

Abstract

Following the agreement of the ASEAN Economic Community (AEC) in 2015, it has been approved that cooperation between ASEAN and the other five partner countries, namely China, Japan, Australia, New Zealand, and Korea, has been bound in new economic partnerships, Regional Comprehensive Economic Partnership (RCEP). The main objective of RCEP is to empower economic integrity and enhance the economic development of respective member countries. Coffee and cocoa are two of Indonesia’s important estate commodities for exports. A study focusing on coffee and cocoa agribusiness development to take advantage of RCEP was conducted in several production centers of rural areas. This paper aims to analyze the role of coffee and cocoa business in RCEP trade cooperation by: (i) understanding and analyzing trade on RCEP using RCA and RO, (ii) reviewing trade development in RCEP toward Indonesia’s coffee and cocoa performance using Gereffi analysis. This study was conducted in North Sumatra and South Sulawesi provinces. The study revealed an opportunity for coffee and cocoa to increase their market in the RCEP region but only with its high quality. Coffee and cocoa should be well prepared with significant, integrative, and comprehensive improvement. The government is suggested increasing the production and productivity of coffee and cocoa through intensive extension and closely working with the farmers.