ASEAN Free Trade Area Research Articles

Indonesian economic performance on trade and investment after Asean economic community

Indonesia has been signed to participate on ASEAN Economic Community since 7 October 2003, at the ninth ASEAN Summit in Bali. This included an ASEAN Economic Community ‘a single market and production base with free flow of goods, services and skilled labor and freer flow of capital by 2020’. There is much economic progress has been achieved mutually during last decade of this economics community. This economics community seems to be inspired by previous summit about ASEAN free trade area on 1992. This paper examines the Indonesian present trade and investment after joining ASEAN Economics Community and implementing CEPTs, and analyses further the impact of those community/CEPTs on Indonesian trade and investment performance. It was utilized the data on Indonesian exports to and imports from ASEAN countries as well Indonesian invests to and invests from ASEAN countries. The results clearly shown that Indonesian performed well and gained much benefit from this economic community/CEPTs especially in its comparative advantage industry.

Dampak Perdagangan Bebas AFTA Terhadap Transformasi Ekonomi Indonesia

Free trade plays a crucial role in global economic development, especially in the era of globalization, and the ASEAN Free Trade Area (AFTA) aims to create a single market within the ASEAN region through the liberalization of trade in goods. This study examines the impact of AFTA on Indonesia's economic transformation, including increased export and import volumes as well as regional economic integration, highlighting benefits such as the growth of exports in manufacturing, agriculture, and consumer goods, alongside strengthening domestic industries. However, free trade poses risks, such as competition from imported products that could pressure local producers. Using a qualitative approach through literature studies, the findings show a significant increase in export and import volumes following AFTA implementation, although regional development disparities remain a challenge. This study emphasizes the need for strategies to improve product quality, enhance infrastructure, and build sectoral synergy to ensure inclusive economic integration and drive Indonesia's overall economic progress.

Profit Analysis Financial and Marketing Snubnose Pompano (Trachinotus blochii ) In Indonesia: A Review

The Star Pomfret (Trachinotus blochii ), also known as Snubnose Pompano is a key species with potential as a leading fishery commodity in Indonesia. However, challenges lie ahead, particularly with the advent of the ASEAN Free Trade Area (AFTA), which demands increased efficiency to compete against the influx of pomfret from neighboring countries. Currently, most pomfret cultivation method faces several challenges, including harsh weather that complicates transportation, damages cages, and leads to high transport costs. T. blochii can be cultivated in low-salinity ponds (19-12 ppt). Economic analysis of T. blochii, shows a Net Present Value (NPV) of Rp. 2,894,229 with a sensitivity level of 24% from the base value. The Net Benefit-Cost (B/C) Ratio is 1.03, with a sensitivity level of 1.27%. In general, if the Net B/C Ratio is greater than 1, the business is considered viable or profitable. The Internal Rate of Return (IRR) is 49%, with a sensitivity level of 23%, and the Payback Period is 2 years and 8 days. These results indicate that the business of cultivating pomfret in cages is viable, as all four investment criteria meet the requirements.

DYNAMIC VOLATILITY SPILLOVERS BETWEEN CURRENCIES OF ASEAN MEMBER COUNTRIES AND CHINA: EVIDENCE FROM TVP-VAR APPROACH

Driven by the importance of analyzing interregional volatility spillover effects, this study investigates dynamic volatility spillovers between the currencies of China– ASEAN Free Trade Area (FTA) member countries by applying the time-varying parameter vector autoregressive (TVP-VAR) connectedness approach to a sample spanning January 1, 2006, to October 31, 2022. The results show that (1) dynamic volatility connectedness varies over time and reaches peaks due to economic events, such as the 2008 global financial crisis (GFC) and the COVID-19 pandemic; (2) the Chinese yuan (CNY) market assumes more of a net receiving role for volatility spillovers after the 811 exchange rate reform, while the Singapore dollar (SGD) market assumes more of a net transmitting role for volatility spillovers in the whole sample period and (3) negative spillovers are dominant during the study period, except during the European debt crisis. Our findings can help China and ASEAN establish an exchange rate coordination mechanism to prevent the cross-country transmission of exchange rate risk.

The effect of financial inclusion and economic integration on green growth in ASEAN

PurposeThis study was conducted to review the overview of green growth and examine the role of financial inclusion as well as economic integration and other variables on green growth in Association of Southeast Asian Nations (ASEAN) countries.Design/methodology/approachPrincipal component analysis (PCA) was used to construct financial inclusion variables and panel data regression analysis to examine the effect of financial inclusion and economic integration on green growth in 10 ASEAN countries from 2010 to 2021.FindingsThe results showed that financial inclusion had played a role in supporting green growth in ASEAN. The rapid development of green finance and green bonds promoted the implementation of better green growth. The variables of export diversification and trade openness had a significant effect on green growth. Therefore, there is a need for appropriate policies to prevent negative effects on the environment and the behavior of ASEAN countries.Research limitations/implicationsThe findings of this study suggest that policymakers in ASEAN countries not only focus on gaining economic benefits from financial inclusion and economic integration activities but also pay attention to environmental impacts. Moreover, the ASEAN region is actively developing strategic steps in providing easy access to capital and finance as well as expanding international trade activities through ASEAN Free Trade Area (AFTA). Therefore, it is hoped that apart from being able to establish sustainable policies, this region will also encourage and optimize previous policies to make them more environmentally friendly.Originality/valueThis study used a green growth approach with the Index by the Global Green Growth Institute. This index considered aspects of green economic opportunities and social inclusion that have not been applied in previous studies. In addition, this study contributed to review the activities of economic integration and financial inclusion and the sustainability of green growth in ASEAN countries. Until now, there has been no research focused on ASEAN; even though ASEAN has long carried out economic integration and encouraged financial inclusion policies, this region is vulnerable to environmental degradation issues.

Standards and non-tariff barriers in trade – A case study of South Asia

SAFTA (South Asian Free Trade Area) is not a success story. Geographically connected, but highly dis-integrated, with more than 90 % outward-oriented trade, this is the case of South Asia. Of course, military, and political tensions are the major obstacles. However, recent data and studies show that cumbersome procedures, ruthless application of NTMs (Non-Tariff Measures) and restrictions are the biggest challenges for trade in the region. NTMs are important for public health and the environment but if such standards are mutually recognized through bilateral or multilateral agreements then the hectic and lengthy procedures can be avoided. This is the basic hypothesis investigated and checked in this research. Taking four economies, (Bangladesh, India, Pakistan, and SriLanka) two-step process is adopted; firstly, AVEs (Ad Valorem Equivalents) of NTMs are calculated and then incorporated in an extended GTAP (Global Trade Analysis Project) based CGE model. Simulation results suggest that if standards are mutually recognized then all countries will be better off, intra-regional trade and welfare will increase. The study recommends that SAFTA should proceed to establish such a mechanism that enables member countries to recognize the certificates and tests approved by the exporting countries. Further, Port restrictions and the issue of para-tariffs should be discussed in future negotiations.

ANALISIS GAP BIDANG SUMBER DAYA MANUSIA (SDM) RUMAH SAKIT PKU MUHAMMADIYAH YOGYAKARTA UNIT II MENUJU RS TIPE B

Background : Issues of ASEAN Free Trade Area ( AFTA ) and globalization of the world economy demands which is every profit and non-profit organizations to compete in marketing and resource. The changes, requires hospitals to survive among competitors that would appear at any moment. Therefore , Human Resources (HR) hospitals must be able to respond it. HR needs proper planning in accordance with the service requirements of each unit in accordance with the classification of hospitals based on the Regulation of the Minister of Health ( Permenkes ) number 56 of 2014 as well as national accreditation standard version of the Commission on Accreditation of Hospitals 2012 ( KARS ). So the RS PKU Muhammadiyah Yogyakarta Unit II will head the hospital type B and accreditation .Methods: The study design was qualitative used in-depth interviews and quantitative method for analyzing a plan about between condition HR today and the need for hospital accreditation of type B and KARS version 2012. While quantitative data obtained through questionnaires Need Assessment journal guidelines on Managerial Competency Development at Provincial and District HospitalsResults : Based on the research results, there is a shortage of human resources about the type and number according to hospital type B and for the accreditation of 99 elements document ratings are 96 % complete . As for performance assessment PKU Muhammadiyah Yogyakarta Unit II responsibility for the examination and treatment, training, science and research, issues of hospital management which is indispensable. To support the referral level, in terms of both treatment and prevention. As well as for international cooperation needs to be improved. While the assessment of training needs at the level of priority on the entire item, respondents give a high priority level assessment.Conclusion : There is a shortage of the type and quantity of human resources between the condition of human resources today and the provisions of hospital type B and there are some completeness of documents for the accreditation of qualifications assessment and education staff KARS 2012 version. Keywords : hospital type B, Permenkes 56/2014, accreditation of KARS version 2012, human resources.

Do Trade Agreements Enhance Bilateral Trade? Focus on India and Sri Lanka

This article examines bilateral trade relations between the two important countries of South Asia, India and Sri Lanka, in light of the South Asian Free Trade Area (SAFTA) and the India–Sri Lanka Free Trade Agreement (ISFTA). The analysis period spans the years 1995 to 2020. The primary analysis found that bilateral trade has been sluggish and that the SAFTA and ISFTA agreements have had no discernible effect on these two countries’ bilateral trade performance. The causes of lackluster trade performance were investigated using the “revealed comparative advantage” and the “trade complementarity” indices. Clear evidence was found demonstrating that the reason for the bilateral trade’s consistent lackluster performance is due to both countries’ lack of revealed comparative advantage in the majority of product groups, followed by export similarity in the product groups where they do have a comparative advantage. The findings also confirm the suspicion of many observers that they are competitors rather than natural trading partners. Although any substantial future increase in their bilateral trade is improbable and fanciful, the paper reflects on methods of strengthening bilateral trade.

Peran Perlindungan Hukum Terhadap Pasar di Era Liberalisasi Perdagangan di Indonesia

Investing in economic development is an important aspect because investment is one of the driving forces in the process of strengthening a country's economy. Several countries have made efforts to increase investment within the framework of their economic policies, as one way to encourage the process of strengthening the economy (Jati, 2012). Over the last decade, investment has not only become an important need for a country to advance its economic development but is also the most important means of developing industry. The research method used in this journal is qualitative. This research uses a qualitative approach to understand the factors influencing traditional markets and their impact on society and the economy. In this research, the author uses descriptive analysis to explain the conditions of traditional markets and the impact of changes in consumer preferences and the shift in people's shopping places to modern shopping centers. Indonesia has decided to become a member of both regional and world trade, such as: GATT (General Agreement on Tariffs and Trade), AFTA (Asean Free Trade Area), APEC (Asia-Pacific Economic Cooperation) and WTO (Word Trade Organization). Indonesia has become a member of regional and world trade, so at the same time, Indonesia has become part of the global community and trade liberalization. Basically, liberalization creates an era of global trade that is free of borders, protection and barriers. This also increases trade competition between economic actors. The challenges of traditional markets in facing the impact of globalization and trade liberalization are characterized by the flow of investment into Indonesia from one most profitable region to another in all investment sectors. This phenomenon makes capital investment or investment a demand to meet the needs of a country, company and society, for example by investing in the modern retail industry (modern markets), such as: supermarkets, hypermarkets, minimarkets.

Assessing the triage and efficacy of strategies of SAARC to improve regional integrity of South Asia using multicriteria group decision making under q-rung orthopair hesitant fuzzy environment

The South Asian Association for Regional Cooperation (SAARC) plays a crucial role in fostering regional integration and cooperation among the countries of South Asia. However, the organization faces various challenges in achieving its objectives due to the complex and dynamic nature of the region. This study aims to assess the triage and efficacy of strategies employed by SAARC in pursuit of regional integrity in South Asia, using a Multi-Criteria Group Decision Making (MCGDM) technique. The assessment process involves several uncertainties which are resolved using q-rung orthopair hesitant fuzzy (q-ROHF) set. A distance measure is developed for q-ROHF sets and is applied to find the best strategy among six well known strategies, viz., SAARC Agreement on Trade in Services (SATIS), SAARC Development Fund (SDF), Establishment of South Asian University (SAU), SAARC Arbitration Council (SARCO), South Asian Preferential Trade Agreement (SAPTA) and South Asian Free Trade Area (SAFTA) through SWARA-TOPSIS based MCGDM technique. The MCGDM method is updated by developing several aggregation operators, viz., Archimedean q-ROHF weighted average, q-ROHF Einstein weighted average, q-ROHF Hamacher weighted average, q-ROHF Frank weighted average along with their geometric forms to combine decision makers’ individual decision. The result shows that the most effective strategy for the economic integration of SAARC is SDF; SATIS comes next as best strategy for economic integration of SAARC. The study reveals that SAU has least impact on the regional economic integration of SAARC. The achieved results reveals the age old proverb that “play on the stomach and sit on the back” – the members of SAARC who are by nature economically poor can afford to take initiative for a successful effective regionalization if it is planned to bring socio economic development of themselves.

Labour Mobility in the Asean Economic Community – A Story in Viet Nam's Sustainable Development Goals

Purpose: This article analyzes Vietnam's sustainable development strategy when participating in the Southeast Asian Community of Nations (ASEAN) based on 3 pillars: Political-Security Community, Economic Community and Socio-Cultural Community. The admission of labour by member states participating in ASEAN's labour market will become a more cohesive political-economic entity, a community "united in diversity"; continue to be an open and important regional cooperation organization in the Asia-Pacific. Theoretical reference: The overall objective of the ASEAN Community is to build the Association into a deeper and more binding intergovernmental cooperation organization based on the legal basis of the ASEAN Charter; but not a supranational and non-closed organization that still expands cooperation with the outside. Methods: the article analyzes the factors affecting the outlook, the labour market in ASEAN has gradually transformed into an intergovernmental cooperation organization with a higher level of legal binding and deeper links but has not become a supranational organization. In that process, Vietnam's participation in the ASEAN labour market is an inevitable process of the ASEAN Economic Community. Results and conclusions: In the economic field, this is an area with important strides and is currently a driving force for accelerating the process of regional integration. Up to now, ASEAN has basically fulfilled its commitments on the formation of the ASEAN Free Trade Area (AFTA), with most tariff lines having been reduced to 0-5%. ASEAN has identified 12 priority areas for early integration to further boost intra-regional trade. Intra-regional trade currently reaches about US$300 billion and accounts for about 25 per cent of ASEAN's total trade. Vietnam's participation in the ASEAN Economic Community has favorable factors and challenges. Vietnam needs to improve policies in training high-quality human resources to meet labor standards in the ASEAN Economic Community. Implications of research: The ASEAN Economic Community aims to create a single common market and unified production base, including the free flow of goods, services, investment, capital and skilled labour; thereby enhancing competitiveness and promoting shared prosperity for the whole region; making it attractive for investment – business from the outside. Viet Nam's extensive labour market participation in ASEAN will boost effectiveness in achieving the Sustainable Development Goals Originality/value: With the goal of "For an ASEAN Economic Community for Sustainable Development", the article analyzed Vietnam's participation in the ASEAN labour market.Successful integration in the labour market will help Vietnam reduce poverty rates, improve the quality of human resources and develop sustainably.

The Competitiveness of Indonesian Sugar Export in The South East Asia Region

Sugar industry has an important role in the Indonesian economy because of its ability to absorp a lot of manpower. AFTA (ASEAN Free Trade Area) provides transaction convenience both export and import between the member of ASEAN. This study aims to analyze the competitiveness of Indonesian sugar export inside ASEAN area and to estimate the trend of Indonesian sugar export. The competitiveness analysis uses RCA (Revealed Comparative Advantage) method while trend estimation uses Trend analysis. The RCA analysis result shows that Indonesia has low competitiveness but shows progress in last 3 years. While RCA analysis of Thailand and Myanmar shows declining trend. The declining trend of Thailand’s RCA is caused by the development of sugar cane based ethanol industry. While the declining trend of Myanmar’s RCA is caused by the decrease of sugarcane area and only temporary. The trend analysis result shows that Indonesian sugar export is increasing. The main export destination country for Indonesian sugar product is Vietnam. Vietnam also shows increasing trend in sugar import. So it will become an opportunity for Indonesia to increase its export value.

A Tale of Too Little: Anti-dumping Tariff Between SAFTA Contracting Parties

Despite eight neighbouring Member States of the South Asian Association for Regional Cooperation (SAARC) signing the intra-regional preferential trade agreement (PTA), trade between South Asian countries is among the lowest in the world. This article analyses one aspect of the trade under the South Asian Free Trade Area (SAFTA) – anti-dumping duties in the internal trade between the SAFTA contracting parties. It demonstrates that SAFTA has a very sketchy rule on anti-dumping, and even that has hardly made any impact on the intra-SAARC trade. The article argues that the SAFTA as a PTA within the broader framework of a regional institutional mechanism needs to be more ambitious in scope and should dismantle the antidumping duties in intra-SAARC trade. Anti-dumping, SAARC, SAFTA, South Asia, free trade agreements

Impacts of Tariff Rates on Input Source Choice: Evidence from Indonesia

This study empirically examines how a reduction in input tariffs changes firms' choices between domestic and foreign inputs. In order to do so, we employ Indonesian manufacturing surveys from 2002 to 2010 and compute the share of imported inputs among total inputs at the firm‐product level. With this dataset, we examine the effect of preferential tariffs for ASEAN countries—that is, ASEAN Free Trade Area (AFTA) tariffs. Our findings can be summarized as follows: First, we found that a reduction in AFTA tariffs in Indonesia encouraged plants to raise their share of foreign inputs. Second, such an effect of AFTA tariffs was observed only for indigenous plants, or those whose primary sales market is the domestic market. Third, we found that the more productive plants experienced a greater impact of AFTA tariffs on foreign inputs. In short, the reduction in AFTA tariffs encouraged input reallocation, at least in some specific firms in Indonesia.

Dampak Kerjasama AFTA dan Indonesia Terhadap Pemulihan Perekonomian Pasca Covid-19

The ASEAN Free Trade Area (AFTA) is an economic and trade cooperation agreement consisting of ASEAN countries. AFTA aims to realize increased trade cooperation by establishing a free trade area in an effort to increase the regional economic competitiveness by making ASEAN a global production center. This cooperation, which was formed to mutually encourage the country's economic growth, will be very useful, especially when the Covid-19 pandemic hit the world. Declining economic conditions due to Covid-19 have forced all countries to carry out economic recovery in order to create post-Covid-19 economic growth. So with that, the authors conducted a study entitled "The Impact of AFTA and Indonesia Collaboration on Post-Covid-19 Economic Recovery". The purpose of this research is to find out the impact resulting from the AFTA cooperation on post-Covid-19 economic recovery. The research method used by researchers is a qualitative method, namely by collecting data through analysis and literature study. From the results of research based on literature, it can be interpreted that the existence of this AFTA cooperation is sufficient to help the economy in Indonesia.

Impacts of Trade Liberalization in the Least Developed Countries: Evidence From Lao PDR

This study empirically investigates the effects of tariff reductions in a least developed country on its economy. Specifically, we focus on tariff reductions based on the ASEAN Free Trade Area (AFTA) in Laos. First, we analyze how the reduction of AFTA tariff rates in Laos affects Laos's imports from AFTA member countries. Our main finding is that the reduction of AFTA tariffs in Laos does not significantly change Laos's imports. Second, we investigate their effects on plant‐level employment. Consistent with the observation of a negligible change in Laos's imports, we find no significant changes in plant‐level employment. In short, although Laos decreased its tariff rates against other AFTA members, imports from them did not significantly increase, and no significant changes occurred in employment. We discuss several possible reasons for these insignificant effects.

Indonesia's Role in Realizing the Vision of the ASEAN Economic Community (AEC) and the ASEAN Socio-Cultural Community (ASCC)

Indonesia, as one of the largest economies and population in Southeast Asia, plays a crucial role in realizing the vision of the ASEAN Economic Community (AEC) and the ASEAN Socio-Cultural Community (ASCC). The goal of the AEC is to establish a unified marketplace and manufacturing hub where goods, services, investments, and highly skilled workers can move freely, while the ASCC seeks to promote social development and cultural cooperation in the region. Indonesia has taken various measures to support the AEC, including implementing economic reforms to improve competitiveness, reducing barriers to trade and investment, and promoting regional integration through initiatives such as the ASEAN Free Trade Area (AFTA) and the ASEAN Investment Area (AIA). Indonesia also plays an active role in ASEAN negotiations with other regional partners such as China, Japan, and South Korea to enhance economic cooperation. In terms of the ASCC, Indonesia has made efforts to promote social development and cultural cooperation in the region by prioritizing issues such as poverty reduction, healthcare, education, and disaster management. Indonesia has also established cultural exchange programs and participated in various ASEAN cultural events to promote understanding and cooperation among member states. Overall, Indonesia's active participation and support in realizing the vision of the AEC and the ASCC are essential to achieving regional economic integration and social development in Southeast Asia.

Determinants of Bilateral Agricultural Trade of SAARC Region: a Gravity Model Approach

The South Asian Association for Regional Cooperation (SAARC) region is an important player in the world agriculture trade. They have vast potential to strengthen their position in global agricultural trade due to theregion's opportunities to increase agricultural production combined with growing global demand. To discover the SAARC potential of agricultural trade patterns, the present paper examines the determinants of bilateral agricultural exports from 2000 to 2019. The gravity model was estimated by employing the Poisson Pseudo Maximum Likelihood (PMML) technique, including zero trade flows for panel data. The results confirm the positive and significant impact of exporter gross domestic product (GDP), importer GDP, Broder, common language, South Asian Free Trade Area (SAFTA), and India-Sri Lanka Free Trade Agreement (ISFTA) on bilateral agricultural trade inthe SAARC region. On the other hand, distance and development levels significantly negatively impact bilateral agricultural trade. Lastly, the study showed an insignificant impact of the bilateral exchange rate.

Spatiotemporal patterns and driving mechanism of tourism ecological security in Guangxi, China

Tourism ecological security (TES) is an important index reflecting the sustainable development of the regional economy. The construction of the China and ASEAN Free Trade Area has increased the total tourist consumption of Guangxi province by 36.48%. Unfortunately, overconsumption of resources, air pollution, disturbance of indigenous life, and other environmental degradation problems emerged due to the significant increase in tourists. Measuring the resilience of the tourism ecosystem is an urgent need to promote the high-quality development of tourism in Guangxi. To explore the dynamic changes in TES and its driving mechanism, the DPSIR (driver–pressure–state–impact–response) model for the tourism ecosystem was developed. The dynamic changes in TES and its driving mechanism from 2010 to 2019 were analyzed using fuzzy matter-element analysis, Markov chains, Geodetector, and other methods. The results show that: (1) the TES value increased steadily by 72.73%; the improvement speed was Northeast > Southwest > Southeast > Northwest; (2) TES was negatively correlated with location, 14 cities developed independently; (3) the TES has a smaller probability to shift the lower level; (4) urbanization, water consumption, green area, tourism revenue, and the number of students in colleges had significant effects on TES. Four policies were proposed to improve TES: (1) developing forest tourism; (2) implementing greening projects in abandoned mining areas; (3) increasing tourism technical personnel; and (4) reducing clearance time for inbound tourists.

An analysis of India’s export potential in South Asia under SAFTA

There is a consensus in the literature that higher exports are associated with increased economic growth, productivity, and employment. This paper attempts to analyze India’s export potential in the South Asian region following the South Asian Free Trade Area (SAFTA) agreement. Using panel data, an augmented gravity model analysis is employed for the period from 2004 to 2021. The analysis finds a positive and significant effect of trading countries’ gross domestic product (GDP) on India’s total exports, whereas the effect of the per capita GDP differential between the countries is negative. This paper does not find any significant effect of distance, border, or common language on India’s total exports. The study also finds that from 2004 to 2021, India’s average export potential was positive with three countries (Pakistan, Bangladesh, and the Maldives) and negative with four countries (Nepal, Sri Lanka, Afghanistan, and Bhutan). India had the highest export potential with Pakistan during this period. The study suggests that India must raise its exports to those South Asian Association for Regional Cooperation (SAARC) member nations where it has not been able to export in accordance with its potential and explore trade opportunities with other countries in Asia, Europe, and North America. In this context, it is crucial to focus on trade and infrastructural reforms to boost India’s exports.