Experts of IPB Talks on Opportunities and Challenges in International Trade Agreement
Director of Trade Analysis and Policy Studies, who is also Professor of the Faculty of Economics and Management of Bogor Agricultural University (FEM IPB), Prof. Rina Octaviani, talking on the opportunities and challenges of international trade and trade agreements of Indonesia, on Thursday, 31 March 2016. He delivered it in a forum discussion entitled "Opportunities and Challenges in Indonesia in Economic Integration", in FEM Campus IPB Bogor.
Prof. Rina stated that Indonesia, which is a major player in the Association of Southeast Asian Nations (ASEAN), must accelerate its preparations to face the region`s market integration, the ASEAN Economic Community (AEC). In world trade, she said, the United States and China is the important players in world demand for goods. China’s current economic growth began to fall, while the policy of the United States economy began to rise.
In a trade cooperation agreement, Prof. Rina added, to establish a region-wide FTA in East Asia, there is a need to define the actors. China will try to use its growing influence to reshape the rules and institutions of the international system to better serve its interests, and other states in the system. The American era is coming to an end, currently Japan and China have great influence on East Asia.
"Both short-run and long-run factors have contributed to the recent slowdown in trade, the price of food and primary product would also go down on the world market. Free trade can lower prices if the country is a net importer. Supporting entrepreneurship would boost Indonesia’s supply side and increase social welfare by diversifying the sources of growth and increasing job opportunities. This means that these opportunities can boost social welfare. Market share for food is very high in a developing country like Indonesia, "she said.
According Prof. Rina, Indonesia should be able to utilize the slowdown in the global economy. However, Indonesia does not utilize this golden opportunities.
When joining the Trade-Pacific Partnership (TPP), she added as Indonesia has a big population and competitive power with abundant human resources to become a major player in the ASEAN Economic Community in 2015 we have to anticipate it carefully. To face the AEC`s formation in 2016, Indonesia needs to increase its competitive power "Indonesia should be ready to improve its competitiveness in the national or international economy, the competitiveness of the industry, the logistics, the quality of export infrastructure and connectivity, "she said.
On the same occasion, the Secretary of the Department of Economics of FEM IPB, Dr. Tanti Novianti, expressed the impact of trade agreement Free Trade Agreement (FTA) ASEAN-India, and ASEAN – Australia and NEW Zealand on the Indonesian economy. A Simulation Analysis on Impact of ASEAN-India Preferential Trade Agreement on Plantation Commodities and ASEAN ANZ increase relative to its trade with the rest of the world. "Please compare the FTA ASEAN India which beneficial, for a higher standard of living of, while ASEAN ANZ FTA is negative," she said. (Wied)
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