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CHAPTER I INTRODUCTION

I.1.

BACKGROUND OF THE STUDY

Pada awal bulan November 2006 berlangsung Pertemuan Puncak ke-3 Bisnis dan Investasi China-ASEAN di Nanning, Guangxi, China. Dalam forum tersebut, PM China Wen Jiabao mengatakan dalam sambutannya, bahwa kemajuan pesat pembangunan ekonomi China akan membuka lebih banyak peluang bagi kerja sama bilateral antara China dan negara-negara anggota ASEAN. Selain itu telah dicapai kesepakatan, bahwa China bertekad mewujudkan kawasan pasar bebas (FTA) dengan Brunei, Filipina, Indonesia, Malaysia, Singapura, dan Thailand paling lambat pada 2010 sedangkan dengan Kamboja, Laos, Myanmar, dan Vietnam paling lambat tahun 2015. Tak ketinggalan Presiden Susilo Bambang Yudhoyono beserta rombongan juga hadir dalam pertemuan tersebut. Seperti ungkapan yang cukup

terkenal, Belajarlah hingga ke negeri China, maka rombongan tersebut juga punya tekat belajar dari China tentang berbagai hal. Bukan hanya belajar dari keberhasilan China membangun ekonominya, namun juga belajar dari pengalaman bangsa lain tentang China, khususnya dalam hubungan dagang internasional. Tawaran kerja sama bilateral dari PM China Wen Jiabao di kawasan pasar bebas di ASEAN apakah mampu dimanfaatkan oleh

bangsa Indonesia sebagai peluang emas, atau justru menjadi mimpi buruk karena kita tidak siap menghadapi resiko hubungan dagang dengan China. Semoga bangsa Indonesia tidak akan menjadi bangsa konsumtif yang kalang kabut menghadapi banjir produk China, tapi juga mampu menghidupkan industri nasional sendiri, sebagai salah satu landasan kemandirian bangsa.

Belajarlah dari dan tentang bangsa China!

In many countries, international trade became one of the main factors to increase GDP. Although international trade has been occurring for thousands of years, its impact on economic interests, social, and political has just felt several centuries later. International trade also encourages industrialization, progress of globalization of transportation and the presence of multinational companies. Started from January 1st, 2010, the ASEAN-China Free Trade Agreement (ACFTA) was applied. China and the six-member of ASEAN finally joined the free trade area (FTA). This means that products from China will flood the domestic market. World Trade Organization (WTO) said, at least about 400 trade zone will operate in 2010. It makes a first step towards broader global trade liberalization. Looking at Chinas economic growth and trade, many experts said its phenomenal. Chinas growth rate is much faster than predicted. According to FOCUS Magazine, in December 2005, Chinas government increased their GDP to 285 billion dollars which make Chinas economy ranked 6th worldwide. If

combined with Hong Kong, it will be able to match USA, Japan, and Germany. According to Hong Liang from Goldman Sachs, since last 27 years, the economy of China has grown by an average of 9.4%, while GDP per capita has increased by 600%, which is the first in world history. With the export-oriented economy system, China could increase the export value from 267 billion dollars (2001) to 762 million dollars (2005). 1 China with population of approximately 1.3 billion and a vast area became an attraction for industry and commerce. China seems to be a big hope to boost the turnover of commerce industries, like the sweet sugar that can suck the ants to come. European saw that the market offers boundless opportunities. The pursuit of closer to the market has become the reason why German and European companies settle their factories and cooperate with China. In addition to high production cost in Germany, it is strengthening their desire to move their main production to another country with lower production cost. Chinas economy that is export-oriented becomes heavy challenges to industrialized countries. Competitive pressure from China has risen rapidly, not only in the textile sector, but also the electronic industry, telecommunications, automotive and transportation.

In 1994, after many years of negotiations and set backs, the Uruguay Round (UR) of the General Agreement on Trade and Tariffs (GATT) was finally concluded and signed by more than a hundred countries. It represents the first

(Nugroho, 2006)

major worldwide effort in trade liberalization where the signatories agreed to reduce tariffs over time to allow for improved access to their markets. Indeed, it seemed that the world has entered a new era of trade liberalization around the world. Yet, the 1990s also saw a rise in regionalism with the emergence of two major regional trading blocs, the European Union (EU) and the North American Free Trade Agreement (NAFTA). Not only they adopted deeper and broader tariff reductions, they try to reduce non-tariff barriers to further boost trade among member nations. The conclusion of the UR of GATT and the formation of two powerful trading blocs, the E.U and NAFTA, provide an interesting situation for countries in South East Asia. On one hand, they are encouraged to trade in a newly liberalized world and yet are facing the risk of being sidelined from the E.U. and/or NAFTA economic concentration. The later post a significant concern as much of South East Asian exports are destined to developed economies in these blocs. Countries in South East Asia are initially hesitant in embracing economic regionalism and it was only towards the late 1990s, that South East Asian nations became more serious in pursuing a regional trading block and FTAs. Since then numerous FTAs agreements has been signed by countries in the region. The economic emergence of the Association of Southeast Asian Nations (ASEAN) brings not only opportunities but also challenges to each of the member countries. Indonesia was hesitant about committing itself to permanent structures and agreements that would facilitate functional integration of their economies. In particular, Indonesia was resistant to market sharing, fearing that its market, by far

the largest in ASEAN, would be swamped by the exports of its more competitive ASEAN partners. 2 Thus, Indonesia reluctantly agreed to accept in principle the ASEAN Free Trade Area (AFTA) contained in the Framework Agreement on Enhancing ASEAN Economic Cooperation signed in 1992. Although committed to AFTA theory, Indonesia won a fifteen years delay of the implementation of AFTA. But in 1994, the time frame was brought to 2003. In 1998, the time frame was again brought to 2002 with some flexibility given to new members. The administration of President Megawati expressed reservations about the pace of liberalization with AFTA, and noted an interest in pursuing an emergency exit clause from AFTA commitments in general. However, Indonesia fully implemented the final stage of its commitments under the AFTA on schedule on January 1st, 2002. The ASEANChina Free Trade Area is a free trade area among the ten member states of the Association of Southeast Asian Nations (ASEAN) and the People's Republic of China. China first proposed the idea of a free trade area in November 2000. The initial framework agreement was signed on 4 November 2002 in Phnom Penh, Cambodia, with the intent on establishing a free trade area among the eleven nations by 2010. The free trade area came into effect on January 1st, 2010. The ASEANChina Free Trade Area is the largest free trade area in terms of population and third largest in terms of nominal GDP. Over 90 % of the commodities traded between China and the six original ASEAN countries Brunei, Indonesia, Malaysia, the Philippines, Singapore and

(Frederick & Worden, 1993)

Thailand will have no tariffs in 2010. By then China's average tariff on goods from ASEAN countries will be cut down to 0.1 % from 9.8 % currently. The zerotariff rate for 90 % of goods traded is expected to be extended between China and four new ASEAN member countries, Cambodia, Laos, Myanmar and Vietnam, in 2015. As the ASEAN China Free Trade Agreement, or ACFTA, has been implemented from January 1st, 2010 panicked voices have arisen especially from the industries which see no chance at all of competing with Chinas products such as garments, textiles, manufactured goods and steel. They all voiced the demand to cancel the agreement, or at least to postpone its implementation for some time. Ironically, there has been no such demand from other member countries of ASEAN, even from the so-called "less developed" countries like Cambodia, Laos or Myanmar. Nevertheless the ACFTA had been negotiated since early 2000 and gradually implemented since January 1st, 2005 is just the implementation of the whole agreement with zero tariffs. How 10 years, from 2000-2010, was not long enough to prepare ourselves. First, there might have been no flow of information and communication between the government officials and the industries concerned. It is general knowledge that many Indonesian companies still have a comfortable mentality dating from the good old days, when the government facilitated them not only financially but also with protection against competitors to give them monopolies.

For analyze advantage and disadvantage on ACFTA agreement for business, a research is needed. And, we need the research about ACFTA to fill the weakness. The contribution is to provide explanations to these issues by analyze the export-import performance of Indonesia during the implementation of ACFTA. I.1.1. Title of Thesis INDONESIA CHINA TRADE PERFORMANCE IN TERM OF ASEAN CHINA FREE TRADE AGREEMENT

I.2.

PROBLEM STATEMENT
What is the chance of bilateral trade between Indonesia and China? This

paper tries to analyze bilateral trade between Indonesia and china with some questions to be answered which are: 1. What is ASEAN China Free Trade Agreement (ACFTA)? 2. How is the development of Indonesia's trade balance with China during the period 2005-2009? 3. What are the top commodities of Indonesia's export to China and Chinas export to Indonesia? 4. What steps can be made by the Government Indonesia related trade with China?

I.3.

RESEARCH OBJECTIVES
Our main purpose is to encourage people to be more aware of international

trading policy, especially ASEAN - China Free Trade Area. This thesis is also made based on the following objectives:
y y

To understand the details about ASEAN China FTA. To determine whether the agreement between ASEAN China brings more advantages or disadvantages to Indonesia

For the fulfillments of one of the requirements for the Undergraduate Degree or Strata-1 at IEU.

I.4.

BENEFITS OF RESEARCH
In general the advantages of this study are:
y

For the readers


o To gain more knowledge about international trade o To gain more knowledge about ACFTA o To gain more knowledge about Indonesian export import o To determine the influence of ACFTA towards Indonesia o To provide guidance in making thesis in international trading,

especially ACFTA
y

For the writer


o To apply the knowledge that has been gained throughout the years

the writer has been studying in IEU


o To get a deeper insight of international trade and ACFTA

For the university


o To provide useful information about ACFTA o To provide guidance for students in making thesis about ACFTA

I.5.

SCOPE OF RESEARCH
The main issue of this thesis work is to make research of Indonesia and

China trade performance during ASEAN China FTA. Investigate in order to be clear about Free Trade Area (FTA) starting from definition of it, and continue with data collection.

I.6.

LIMITATION OF RESEARCH
It was necessary for this study to reduce the number of categories in order

to stay within the time limit for the project as well as to gain the most accurate and real picture of certain circumstances related to ACFTA. We are aware of the fact that this field is suitable for a much more thorough and wider research. Unfortunately there is hardly any possible way to keep track of all strings related to this topic at the same time; therefore I had to concentrate on those aspects that I considered the most important ones for my individual project. The approach to study the field was to look at the trade performance of Indonesia and China during ASEAN China FTA. The data collection is from year 2005 to year 2009 (2010 if available) limited to export-import data only.

CHAPTER II LITERATURE REVIEW

II.1. PREVIOUS RESEARCH


Hutabarat, B., Sawit, M. H., D., S. K., Purba, H. J., Wahida, & Nuryanti, S. (2007) wrote a yearly report on Analysis of Free Trade Agreement Between Indonesia and China and AFTA Cooperation and Its Impacts on Indonesian Agricultural Commodity Trade for Ministry of Agriculture, Agricultural

Research and Development. The report analyzed the trade performance and the impact between Indonesia China and AFTA before and after the agreement for agriculture commodities. The simulation showed that impact of tariff reduction to production, net export, GDP, and welfare has shown a positive sign if China and other member countries in ASEAN implemented tariff reduction in the same value and period. However, bilateral trade agreement Indonesia China has give more benefit to Indonesia compare to bilateral trade agreement ASEAN China in term of export, welfare GDP, and import, for production the condition is the opposite. Siah, K.L., Choong, C.K., Yusop, Z. (2009) wrote a journal and concluded some points. There is prove which implies a positive relationship between the economic size and trade flows. An increase in economic size leads to less reliance on foreign trade because self sufficiency is achieved with an increasing economic size, thereby reducing trade flows with their trade partners. On the other hand, the trade increases with the size of the economy. This may suggest that a large

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domestic market promotes division of labor and thus create opportunities for trade in a wide variety of goods. They also found the idea that the higher the income level, the greater the production capacity and the larger amount they can export as well as the greater the domestic consumption and import demand. It also indicated a greater ability of the exporters to produce and export at a lower cost, all else remaining constant. It also said that distance is an important factor, which influent the volume of goods traded and is generally regarded as a significant exchange of goods and services. The farther apart two potential trading partners are, the more costly their bilateral trade, in which it erodes possible gains from trade.

II.2. THEORETICAL BACKGROUND


II.2.1. Reason to Trade The five basic reasons why trade may take place between countries are summarized below. A variety of models are described which offer a reason for trade and the expected effects of trade on prices, profits, incomes and individual welfare. 1. Differences in Technology Advantageous trade can occur between countries if the countries differ in their technological abilities to produce goods and services. Technology refers to the techniques used to turn resources (labor, capital, land) into outputs. The basis for trade in the Ricardian Model of Comparative Advantage is differences in technology. 2. Differences in Resource Endowments

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Advantageous trade can occur between countries if the countries differ in their endowments of resources. Resource endowments refers to the skills and abilities of a country's workforce, the natural resources available within its borders (minerals, farmland etc.), and the sophistication of its capital stock (machinery, infrastructure, communications systems). The basis for trade in the Pure Exchange model and the Heckscher-Ohlin Model is differences in resource endowments. 3. Differences in Demand Advantageous trade can occur between countries if demands or preferences differ between countries. Individuals in different countries may have different preferences or demands for various products. The Chinese are likely to demand more rice than Americans, even if facing the same price. Canadians may demand more beer, the Dutch more wooden shoes, and the Japanese more fish than Americans would, even if they all faced the same prices. 4. Existence of Economies of Scale in Production The existence of economies of scale in production is sufficient to generate advantageous trade between two countries. Economies of scale refer to a production process in which production costs fall as the scale of production rises. This feature of production is also known as "increasing returns to scale." 5. Existence of Government Policies

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Government tax and subsidy programs can be sufficient to generate advantages in production of certain products. In these circumstances, advantageous trade may arise solely due to differences in government policies across countries.

II.2.2. Free Trade Free trade is a system of trade policy that allows traders to act and transact without interference from government. According to the law of comparative advantage the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices are a reflection of true supply and demand, and are the sole determinant of resource allocation. Free trade differs from other forms of trade policy where the allocation of goods and services amongst trading countries are determined by artificial prices that may or may not reflect the true nature of supply and demand. These artificial prices are the result of protectionist trade policies, whereby governments intervene in the market through price adjustments and supply restrictions. Such government interventions can increase as well as decrease the cost of goods and services to both consumers and producers. Interventions include subsidies, taxes and tariffs, non-tariff barriers, such as regulatory legislation and quotas, and even inter-government managed trade agreements such as the North American Free Trade Agreement (NAFTA) and Central America Free Trade Agreement (CAFTA)

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(contrary to their formal titles) and any governmental market intervention resulting in artificial prices.
Figure 2. 1 Current free trade areas with more than three member countries

Source: Wikipedia II.2.2.1. Trade diversion

According to mainstream economic theory, global free trade is a net benefit to society, but the selective application of free trade agreements to some countries and tariffs on others can sometimes lead to economic inefficiency through the process of trade diversion. It is economically efficient for a good to be produced by the country which is the lowest cost producer, but this will not always take place if a high cost producer has a free trade agreement while the low cost producer faces a high tariff. Applying free trade to the high cost producer (and not the low cost producer as well) can lead to trade diversion and a net economic loss. This is why many economists place such high

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importance on negotiations for global tariff reductions, such as the Doha Round.3 II.2.2.2. Opinion of Economist

The literature analyzing the economics of free trade is extremely rich with extensive work having been done on the theoretical and empirical effects4 5. Though it creates winners and losers, the broad consensus among members of the economics profession in the U.S. is that free trade is a large and unambiguous net gain for society. Quoting Harvard economics professor N. Gregory Mankiw, "Few propositions command as much consensus among professional economists as that open world trade increases economic growth and raises living standards6." Nonetheless, quoting Prof. Peter Soderbaum of Malardalen University, Sweden, "This neoclassical trade theory focuses on one dimension, i.e., the price at which a commodity can be delivered and is extremely narrow in cutting off a large number of other considerations about impacts on employment in different parts of the world, about environmental impacts and on culture7." Most free traders would agree that there are winners and losers from free trade, but argue that this is not a reason to argue against free trade, because free trade is supposed to bring overall gain due to idea
3 4

(Landsburg) (Fuller & Geide-Stevenson, Fall 2003) 5 (Friedman, 1997) 6 (Mankiw, 2004) 7 (Soderbaum, 2007)

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that the winners have gained enough to make up for the losses of the losers and then some. Chang argues otherwise, saying that the economy could shrink as a result, and that some people being worse off due to trade displacement without recourse to welfare assistance to find a better job (as might be expected in poor countries) is not acceptable8. In Kicking Away the Ladder, Ha-Joon Chang reviews the history of free trade policies and economic growth, and notes that many of the now-industrialized countries had significant barriers to trade throughout their history. Protectionism under the auspices of the infant industry argument (related to import substitution industrialization), was first pursued by Alexander Hamilton in the 1790s in opposition to the admonition of Adam Smith, who advised that the United States focus on agriculture, where it had a comparative advantage. In the 1840s Friedrich List, known as the father of the infant industry argument9 , advocated the infant industry argument for Germany. Chang's research shows that the United States and Britain, sometimes considered to be the homes of free trade policy, were aggressive protectionists. Britain did end its protectionism when it achieved technological superiority in the late 1850s with the repeal of the Corn Laws, but tariffs on manufactured products had returned to 23% by 1950. The United States maintained weighted average tariffs on manufactured products of approximately 40-50% up until the 1950s, augmented by the natural
8 9

(Chang, 2008) (Chang, 2008)

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protectionism of high transportation costs in the 19th century 10 . The most consistent practitioners of free trade have been Switzerland, the Netherlands, and to a lesser degree Belgium11. Source: Wikipedia II.2.3. Association of Southeast Asian Nations (ASEAN) ASEAN is a geo-political and economic organization of 10 countries located in Southeast Asia. Its aims include the acceleration of economic growth, social progress, cultural development among its members, the protection of the peace and stability of the region, and to provide opportunities for member countries to discuss differences peacefully.
Table 2. 1 Members of ASEAN

10 11

(Chang, 2008) (Chang, 2008)

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II.2.4. ASEAN Free Trade Area (AFTA) ASEAN Free Trade Area (AFTA) is a trade bloc agreement by the Association of Southeast Asian Nations supporting local manufacturing in all ASEAN countries. A proposal to set up a Free Trade Area in ASEAN was first mooted by the Thai Prime Minister Anand Panyarachun, which was agreed upon with amendments during the ASEAN Seniors Economic Official Meeting (AEM) in Kuala Lumpur. On 28 January 1992, the ASEAN members signed the Singapore Declaration at the heart of which was the creation of AFTA in 15 years. This is a comprehensive program of tariff reduction in the region, which is to be carried out in phases through the year 2008. This deadline was subsequently moved forward and AFTA became fully operational on 1 January 2003. When the AFTA agreement was originally signed, ASEAN had six members, namely, Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand. Vietnam joined in 1995, Laos and Myanmar in 1997 and Cambodia in 1999. AFTA now comprises ten countries of ASEAN. All the four latecomers were required to sign the AFTA agreement in order to join ASEAN, but were given longer time frames in which to meet AFTA's tariff reduction obligations. (See Error! Reference source not found.) The primary goals of AFTA seek to:

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Increase ASEAN's competitive edge as a production base in the world market through the elimination, within ASEAN, of tariffs and non-tariff barriers; and

Attract more foreign direct investment to ASEAN.

The primary mechanism for achieving the goals given above is the Common Effective Preferential Tariff (CEPT) scheme, which established a schedule for phased initiated in 1992 with the self-described goal to increase the "regions competitive advantage as a production base geared for the world market". Over the course of several years, the initial program of tariff reductions was broadened and accelerated and other "AFTA Plus" activities were initiated. This includes efforts to eliminate non-tariff barriers, harmonization of customs nomenclature, valuation, and procedures and development of common product certification standards. II.2.4.1. The Common Effective Preferential Tariff (CEPT) scheme Unlike the EU, AFTA does not apply a common external tariff on imported goods. Each ASEAN member may impose tariffs on goods entering from outside ASEAN based on its national schedules. However, for goods originating within ASEAN, ASEAN members are to apply a tariff rate of 0 to 5 % (the more recent members of Cambodia, Laos, Myanmar and Vietnam, or CMLV countries, were given

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additional time to implement the reduced tariff rates). This is known as the Common Effective Preferential Tariff (CEPT) scheme. In principle, the free trade area covers all manufactured and agricultural products, although the timetables for reducing tariffs and removing quantitative restrictions and other non-tariff barriers differ. ASEAN members have the option of excluding products from the CEPT: a. Inclusion List. Products in the Inclusion List are those that have to undergo immediate liberalization through reduction in intraregional (CEPT) tariff rates, removal of quantitative restrictions and other non-tariff barriers. Tariffs on these products should be down to a maximum of 20% by the year 1998 and to 0-5% by the year 2002. The new Members of ASEAN have up to 2006 (Viet Nam), 2008 (Laos and Myanmar) and 2010 (Cambodia) to meet this deadline. By the year 2000, there would be 53,294 tariff lines in the Inclusion List representing 82.78% of all tariff lines in ASEAN. b. Temporary Exclusion List (TEL). Products in the Temporary Exclusion List can be shielded from trade liberalization only for a temporary period of time. However, all these products would have to be transferred into the Inclusion List and begin a process of tariff reduction so

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that tariffs would come down to 0-5%. Starting on 1 January 1996, annual installments of products from the TEL have been transferred into the Inclusion List. By the year 2000, there would remain 9,674 tariff lines in the TEL representing about 15.04% of all tariff lines in ASEAN. c. Sensitive List. This contains unprocessed agricultural products, which are given a longer time frame before being integrated with the free trade area. The commitment to reduce tariffs to 0-5%, remove quantitative restrictions and other non-tariff barriers is extended up to the year 2010. The new members of ASEAN have up to 2013 (Viet Nam), 2015 (Laos and Myanmar) and 2017 (Cambodia) to meet this deadline. By the year 2000, there would be 370 tariff lines in the Sensitive List making up 0.58% of all tariff lines in ASEAN. d. General Exception (GE) List. These products are permanently excluded from the free trade area for reasons of protection of national security, public morals, human, animal or plant life and health and articles of artistic, historic and archaeological value. There are 1,036 tariff lines in the GE List representing about 1.61% of all tariff lines in ASEAN. ASEAN members have agreed to enact zero tariff

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rates on virtually all imports by 2010 for the original signatories, and 2015 for the CMLV countries. Source: ASEAN Secretariat II.2.4.2. Rule of Origin

The CEPT only applies to goods originating within ASEAN. The general rule is that local ASEAN content must be at least 40% of the FOB value of the good. The local ASEAN content can be cumulative, that is, the value of inputs from various ASEAN members can be combined to meet the 40% requirement. The following formula is applied:

Raw material cost + Direct labor cost + Direct overhead cost + Profit + Inland transport cost x 100% FOB value

However, for certain products, special rules apply:


y y y

Change in Chapter Rule for Wheat Flour; Change of Tariff Sub-Heading for Wood-Based Products; Change in Tariff Classification for Certain Aluminum and Articles thereof.

The exporter must obtain a Form D certification from its national government attesting that the good has met the 40% requirement. The Form D must be presented to the customs authority of the importing government to qualify for the CEPT rate. Difficulties have sometimes arisen regarding the evidentiary proof to support the

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claim, as well how ASEAN national customs authorities can verify Form D submissions. These difficulties arise because each ASEAN national customs authority interprets and implements the Form D requirements without much coordination. Source: Wikipedia II.2.5. ASEAN China Free Trade Area (ACFTA) The ASEANChina Free Trade Area (ACFTA), also known as the ChinaASEAN Free Trade Area (simplified Chinese: ; traditional Chinese: ; pinyin: Zh nggu

D ngmng Zyu Moy Q ,), is a free trade area among the ten member states of the Association of Southeast Asian Nations (ASEAN) and the People's Republic of China. China first proposed the idea of a free trade area in November 2000. It had overtaken the United States as the third largest trading partner of ASEAN, after Japan and the European Union, when the free trade area came into effect. The initial framework agreement was signed on 4 November 2002 in Phnom Penh, Cambodia, with the intent on establishing a free trade area among the eleven nations by 2010. The free trade area came into effect on 1 January 2010. Trade between China and ASEAN has soared in recent years, to $192.5 billion in 2008, from $59.6 billion in 2003. The new free-trade zone, which will remove tariffs on 90 % of traded goods, is expected to increase that commerce still more. It is also expected to become the world's largest exporter in 2010. The ASEANChina

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Free Trade Area is the largest free trade area in terms of population and third largest in terms of nominal GDP after EU and NAFTA. Source: Wikipedia
Table 2. 2 Population and GDP of ASEAN - China

Source: CIA - The World Factbook (2010)

However, some manufacturers in Southeast Asia are concerned that cheap Chinese goods may flood their markets, once import taxes are removed, making it more difficult for them to retain or increase local market shares. Indonesia is so worried that it plans to ask for a delay in removing tariffs from some items like steel products, textiles, petrochemicals and electronics.

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Most of the goods that will become tariff-free in January including manufactured items are currently subject to import taxes of about 5 %. Some agricultural products and parts for motor vehicles and heavy machinery will still face tariffs in 2010, but those will gradually be phased out. In recent years, China has overtaken the United States to become ASEANs third-largest trading partner after Japan and the European Union. The overall trade balance has shifted slightly in Chinas favor, although there are significant differences among Southeast Asian countries trade balances, said Thomas Kaegi, head of macroeconomic research for the Asia-Pacific region at UBS Wealth Management. Singapore, Malaysia and Thailand have only small trade deficits with China, while Vietnams has grown substantially. In 2008, Vietnam exported items worth $4.5 billion to China but imported about $15.7 billion worth of Chinese goods. In Indonesia, the textile and steel industries are particularly nervous about lifting the tariffs, prompting the government to say that it would ask for a delay on some provisions. No time frame for submitting the request was given, but the ASEAN secretariat said it had not yet received an official request. While competing with more Chinese imports may pose new challenges for ASEAN manufacturers, analysts say increasing their access to the 1.3 billion people of China could produce significant benefits.

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Rodolfo C. Severino, who was secretary general of ASEAN from 1998 to 2002, identified Malaysia which already exports palm oil, rubber and natural gas to China as one country that might benefit the most from the removal of tariffs. But nations like Vietnam that focus on the production of cheap consumer goods are more likely to be hurt, said Mr. Severino, head of the ASEAN Studies Center at the Institute of Southeast Asian Studies in Singapore. Those countries may need to look for new export products and identify new niche markets, he said: This is the nature of competition. Song Hong, an economist, expects China to import more agricultural goods, like tropical fruit, from countries like Thailand, Malaysia and Vietnam when the trade area takes effect. That could hurt Chinese farmers in southern provinces like Guangxi and Yunnan, said Mr. Song, director of the trade research division at the Institute of World Economics and Politics at the Chinese Academy of Social Sciences in Beijing. Mr. Sothirak, who was Cambodias minister of industry, mines and energy from 1993 to 1998, said the removal of tariffs might help increase Cambodias agricultural exports to China. Cambodia needs to diversify its export markets because its exports to the United States and Europe have declined, he said. While he does not hold much hope that Cambodian textile exports would be able to compete with Chinas highly developed garment industry,

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he said he believed the free trade area might entice more Chinese garment factories to set up operations in Cambodia, where production costs and labor were cheaper. Pushpanathan Sundram, deputy secretary general of ASEAN for ASEAN Economic Community, acknowledged that there would be some costs involved for some countries when the free trade area took effect, but he said he believed China and ASEAN would mutually benefit. Despite the expectations for increasing trade, Mr. Severino predicted that the introduction of the trade zone would not be a breakthrough event setting off a dramatic surge in commerce comes January. There are many factors that traders and investors consider, and the trend has been going this way anyway, he said. What this does is to send out good signals and show the determination of governments to make things easier. Source: The New York Times (December 2009) The free trade agreement reduced tariffs on 7,881 product categories, or over 90 % of the commodities traded between China and the six original ASEAN countries Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand will have no tariffs in 2010. The average tariff rate on Chinese goods sold in ASEAN countries decreased from 12.8 to 0.6 % on 1 January 2010 pending implementation of the free trade area by the remaining ASEAN members. Meanwhile, China's average tariff on goods from ASEAN countries will be cut down to 0.1 % from 9.8 % currently, Zhang

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Kening, director general of the Department of International Trade and Economic Affairs at the Ministry of Commerce (MOFCOM), said at a press conference held in Beijing. The six original ASEAN members also reduced tariffs on 99.11 % of goods traded among them to zero. The zero-tariff rate for over 90 % of goods traded is expected to be extended between China and four new ASEAN member countries, Cambodia, Laos, Myanmar and Vietnam, in 2015. Source: Global Times (December 2009) II.2.5.1. Framework of ASEAN-China Free Trade Agreement

The first area is related to trade and investment facilitation. This free trade agreement will focus on the enhancement of information exchange on legal enactments, regulations and production. The removal of non-tariff barriers such as licensing requirements and quantitative restrictions are also concerned in this free trade agreement. Member countries will also liberalize trading and distribution rights in the manufacturing of products and simplify customs procedures. These countries involved will also accept each other's compatibility assessment procedures and facilitate visa arrangements to get a better flow of business personnel. The free trade agreement will also require the member states to avoid double taxation agreements, promote ecommerce and encourage the business sectors to exchange ideas and improve channels of communications.

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The other area related is the capacity building and technical assistance and this free trade agreement will ensure the enhancement of capacity of ASEAN member states, the newer members in particular to do business with China. The promotion measures included in the free trade agreement will also give favorable or positive consideration to the non-World Trade Organization members of ASEAN. Also, the measures of institutions will also relate to the reinforcement of existent cooperative mechanism between ASEAN and China and the creation of additional institutions to promote bilateral trade between ASEAN and China. Source: The Chinese University of Hong Kong II.2.6. Economic Growth Economic growth shows increasing of goods and services in a certain country during a certain period of time. The production of goods and services can be measured in value added coming from all economic sectors in the related country in which the total value added is well known as Gross Domestic Product (GDP). Therefore, the economic growth is the same with the increase of GDP. If the GDP is illustrated as a cake, the economic groth is similar with the enlargement of that cake where the measurement of growth can be calculated through the %age of GDP increase at a certain year to last

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GDP is presented in to different ways: at current prices and constant prices, and the calculation of the economic growth uses constant price concepts with certain base year 2000 for eliminating inflation factors. Value added is also defined as a compensation of production factor consisting of labor, land, capital and entrepreneurship, which is utilized in producing goods and services. However the economic growth calculated from GDP is only considered the domestic factors without taking into account the ownership of production factor. Detail and complete concept and definition is described in the part of statistical technique explanation. The followings are description of the GDP data and its derivative analysis. Formulation of economic growth is as follow:
 

EG GDP t t-1

= economic growth = Gross Domestic Product = certain year = previous year

II.3. BASIC THEORY

II.4. CONCEPTUAL FRAMEWORK


Figure 2. 2 Conceptual Framework

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CHAPTER III METHODOLOGY OF RESEARCH

III.1. RESEARCH FRAMEWORK


Figure 3. 1 Research Framework

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III.2. VARIABLES IDENTIFICATION


y

Problem Statement Problem statement is used to know the companys operational condition and data gathering can be used to point out the problem of a company.

Purpose of Research To know the prospect of Indonesia-China trade in term of ASEANChina Free Trade Area (ACFTA)

Data Gathering This step is to collect data that will be used for forecasting calculation, consist of Indonesias and Chinas export-import data from year 20052009 (2010 if available).

Basic Theory For this step, it is to look for suitable theory to conduct the study of the already pointed out data.

Secondary Data Gathering Data are collected from Indonesian Statistic Center Bureau and other sources related.

Analysis of Data Researcher used Balance of Trade Analysis, Horizontal Analysis, and Vertical Analysis.

Conclusion and Recommendation

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This is the final step of research. After it has been done, analysis and interpretation from data gathering and data processing, finally, is conclusion and recommendation from this research which hopefully may be used by whom it may concern to develop a strategy to increase Indonesias trade performance.

III.3. OPERATIONAL DEFINITION


y y y y y

ACFTA : ASEAN China Free Trade Area AFTA BEC CEPT Export : ASEAN Free Trade Area : Broad Economic Categories : Common Effective Preferential Tariff : Goods leaving the statistical territory of a country. (United Nations, 1998b)12

y y y

FTA GATT GDP

: Free Trade Area : General Agreement on Trades and Tariffs : Gross Domestic Product

An aggregate measure of production equal to the sum of the gross values added of all resident institutional units engaged in production (plus any taxes, and minus any subsidies, on products not included in the value of their outputs). The sum of the final uses of goods and services (all uses except intermediate consumption) measured in

12

United Nations (1998b). International Merchandise Trade Statistics -- Concepts and Definitions. Statistics Division, Series F, No. 52, Rev. 2 (United Nations publication, Sales No. E.98.XVII.16)

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purchasers' prices, less the value of imports of goods and services, or the sum of primary incomes distributed by resident producer units (42, paras. 1.128 and 2.173-2.174).13
o GDP PPP: The PPP (Purchasing Power Parity) method involves

the use of standardized international dollar price weights, which are applied to the quantities of final goods and services produced in a given economy. The data derived from the PPP method probably provide the best available starting point for comparisons of economic strength and well-being between countries.
o GDP at current prices or nominal GDP at purchaser's prices is

calculated using current reporting period currency and makes comparisons between time periods difficult because of the effects of inflation.
o GDP at constant prices refers to the volume level of GDP. Constant

price estimates of GDP are obtained by expressing values in terms of a base period. In theory, the price and quantity components of a value are identified and the price in the base period is substituted for that in the current period. Two main methods are adopted in practice. The first, referred to as "quantity revaluation", is based on a methodology consistent with the above theory (i.e., by multiplying the current period quantity by the base period price).

13

United Nations, Commission of the European Communities, International Monetary Fund, Organisation for Economic Cooperation and Development and World Bank (United Nations and others, 1994). System of National Accounts 1993 (SNA 1993) (United Nations publication Sales No. E.94.XVII.4)

35

The second, commonly referred to as "price deflation", involves dividing price indexes into the observed values to obtain the volume estimate. The price indexes used are built up from the prices of the major items contributing to each value.14
o GDP (Currency: USD): Dollar figures for GDP are converted from

domestic currencies using single year official exchange rates. For a few countries where the official exchange rate does not reflect the rate effectively applied to actual foreign exchange transactions, an alternative conversion factor is used.
y

GDP growth (annual %) Annual percentage growth rate of GDP at market prices based on constant local currency. Aggregates are based on constant 2000 U.S. dollars.

GNP

: Gross National Product

The value of all final goods and services produced within a nation in a given year. GNP doesn't include goods and services produced by foreign producers, but do include goods and services produced by U.S. firms operating in foreign countries.
y

HS

: The Harmonized Commodity Description and Coding System

14

Technical note describing OECD national accounts, OECD.

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Import

: Goods entering the statistical territory of a country. (United Nations, 1998b)15

Industry, value added (% of GDP) Industry corresponds to ISIC divisions 10-45 and includes

manufacturing (ISIC divisions 15-37). It comprises value added in mining, manufacturing (also reported as a separate subgroup), construction, electricity, water, and gas. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs. It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. The origin of value added is determined by the International Standard Industrial Classification (ISIC), revision 3. Note: For VAB countries, gross value added at factor cost is used as the denominator.
y

SITC

: Standard International Trade Classification

A classification of goods used to classify the exports and imports of a country to enable comparing different countries and years. The classification system is maintained by the United Nations. The SITC classification, currently at revision three is to be standard. The last revision, revision four, was made in 2006.
y y

WTO

: World Trade Organization

Y-O-Y : Year Over Year

15

United Nations (1998b). International Merchandise Trade Statistics -- Concepts and Definitions. Statistics Division, Series F, No. 52, Rev. 2 (United Nations publicati on, Sales No. E.98.XVII.16)

37

A method of evaluating two or more measured events to compare the results at one time period with those from another time period (or series of time periods), on an annualized basis.

III.4. POPULATION AND SAMPLES


The population and samples that are used in this research is the ASEAN China FTA data and export import data of ASEAN Indonesia - China from year 2000 until 2009 (2010 if available).

III.5. DATA COLLECTION


In collecting and processing the data, following methods and procedures are conducted:
y

Collecting the data from authorized source, such as Indonesia Statistics Center Bureau (BPS), ASEAN Secretariat, etc.

Searching the data from internet The data is taken from various news online and also related articles from other website that can provide useful information to be analyzed and used in this article.

Literature study The theories related to this topic are gathered from several text books that are available in library. Besides, some related theory that is used in this research about ACFTA also taken from internet media such as blog, article or official sites that are trustable

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III.5.1. Types of Data There are two types of data, quantitative and qualitative data. Quantitative data is often thought of as being more objective and scientific than its qualitative counterpart and is therefore associated with the more traditional scientific approaches to research as used in the physical sciences. Because quantitative data is in the form of numbers, it can often be analyzed using standard statistical techniques to, for example, test validity. Quantitative data of course implies that what is being measured or researched can be quantified in the first place. It is therefore only applicable to phenomena that can be quantified and measured. Qualitative data on the other hand, relates to data that cannot be subjected to quantitative or numerical analysis. It is therefore associated with phenomena that cannot be, or is difficult to quantify. Data that has been gathered is called qualitative data which is not only in form of text data, but also in type of figures and chart. III.5.2. Source of Data Malhorta (1996) described secondary data as a data collected for some purpose other than the problem at hand. While according to Sekaran (1992), secondary data is a data that have already been gathered by researchers, data published or unpublished source available either within or outside the organization all of which the researcher might find useful. In short, secondary data is a data collected for another purpose and usually the

39

data already exist somewhere. Secondary data can be gathered from internal and external information of an organization. Although it is rate for secondary data provide all the answer to research, such data are useful in a variety of ways (Malhotra, 1992; 245): 1. Indentify the problem 2. Better define the problem 3. Develop and approach to the problem 4. Formulate an appropriate research design 5. Answer certain research question and test some hypotheses Data collected from Indonesia Statistics Center Bureau.

III.6. ANALYTICAL METHOD


There are several analytical methods that will be applied in this research. First method that will be used is the descriptive analysis where it will gives elaborate and comprehensive view on Indonesia and China in ACFTA. Then second, the evaluative analysis method, where all the data that has been gathered will be critically analyzed and will be evaluated. The last one is named conclusive analysis. Conclusive analysis will give the short conclusion about the data about Indonesia and China in ACFTA that has been evaluated.

III.7. STATEMENT ANALYSIS??


Balance of Trade Analysis, Horizontal Analysis, and Vertical Analysis. H: evaluat... series of financial statement data over a period of time

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determine increase or decrease

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42

China in the eye of the World


Pertumbuhan ekonomi dan perdagangan China ternyata tidak selalu membawa keuntungan bagi semua pihak, seperti yang dibayangkan. Mulai dari perusahaan menengah hingga perusahaan papan atas Jerman, memetik

pengalaman yang luar biasa dari hubungan perdagangan dengan China. Pengalaman yang tidak selalu menyenangkan, yang terkadang harus mereka bayar dengan kerugian jutaan Dollar.Permasalahan besar yang sering dihadapi oleh perusahaan Jerman dengan China adalah masalah hak paten atau pemalsuan produk. Kejadian yang cukup menarik perhatian seluruh rakyat Jerman adalah masalah order pemerintah China kepada Jerman, untuk membangun jalur kereta magnet Transrapid. Transrapid, kereta mengambang dengan teknologi magnet yang dikembangkan oleh Siemens dan ThyssenKrupp ini memiliki kecepatan ratarata 500 m/h. Di Jerman sendiri sampai saat ini baru dipakai di jalur uji coba. Sehingga pesanan dari pemerintah China ini dianggap sebagai sebuah keberuntungan oleh pemerintah Jerman. Namun beberapa saat setelah Transrapid bikinan Jerman diresmikan di China, pemerintah China mengumumkan peluncuran kereta magnet buatan China. Satu hal yang sangat mengejutkan pihak Jerman. Banyak yang berpendapat, Jerman telah melakukan kesalahan besar dan menuduh China telah melakukan pembajakan teknologi. Namun China Aviation Industry Corporation (CAC) sebagai pihak yang memproduksi Dolphin (Transrapid made in China) membantah tuduhan tersebut.

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Kejadian Transrapid bukan satu-satunya yang dialami oleh perusahaan Jerman. Dalam pameran mobil internasional IAA di Frankfurt, produsen mobil Jiangling mengundang kekesalan OPEL, karena menjiplak OPEL Frontera nya. Mercedes juga harus menelan pengalaman pahit dengan tindakan Yaxing, yang memproduksi chasis dengan teknologi dan know-how Mercedes. Jenis produk lainnya tidak luput dari bajakan perusahaan China, mulai dari pensil, mainan, pakaian, jam tangan, sepeda motor, mesin industri dan produk-produk kimia. Kerugian yang diderita akibat pembajakan ini berkisar antara 200 Milyar Euro (data Komisi Uni Eropa) dan 500 Milyar Dollar (data pemerintah Amerika). Perusahaan-perusahaan besar mulai giat melakukan perlawanan terhadap mafia plagiator dari China ini. Dengan biaya yang tidak sedikit mereka menelusuri sumber pemalsuan produk hingga ke China dan menuntutnya di Pengadilan. Namun perusahaan kecil dan menengah tidak akan mampu melawan tindakan para plagiator ini, karena keterbatasan kemampuan. Di setiap pameran di Jerman juga diadakan aksi razia terhadap produk China, yang diduga melakukan pelanggaran hak paten. Kampanye melawan Plagiator gencar dilakukan. Salah satunya adalah dengan memberi penghargaan kepada Plagiator dengan design terbaik, yang dilakukan oleh Ikatan Industry Designer Jerman (http://www.plagiarius.com). Penghargaan ini pertama kali diberikan kepada perusahaan Lee dari Hongkong, yang secara jitu meniru produk timbangan berat badan merek Soehnle. Setiap tahun Award ini diberikan kepada para pemalsu produk dalam kesempatan pameran di Jerman.

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Tindakan tidak fair dari pengusaha-pengusaha China tersebut berhasil menempatkan negara China sebagai Plagiator terbaik di dunia. Selain itu mulai dirasakan oleh kalangan industri dan perdagangan eropa, bahwa banyak langkah langkah perusahaan dari daratan China yang dianggap tidak fair dan melanggar perjanjian. Seperti tindakan BenQ yang tiba-tiba menutup pabrik mobile phone Siemens di Jerman, setelah sebelumnya mengambilalihnya dari Siemens. Siemens dan pengacara Jerman saat ini sedang berusaha menuntut BenQ ke pengadilan, atas tindakan yang dianggap melanggar perjanjian. Selain itu BenQ juga pernah digugat oleh Thomson, sebuah produsen LCD yang berpusat di Perancis, atas tindakan BenQ melukai hak paten milik Thomson. Keberhasilan China dalam membangun perekonomian dan perdagangan internasional, ternyata tidak selalu membuat setiap kalangan kagum dan senang serta aman untuk bekerja sama dengannya. Bahkan cenderung ada kesan, keberhasilan diatas penderitaan orang lain. Seorang pengusaha Jerman, kenalan penulis, merasa enggan untuk melakukan kerjasama bisnis lagi dengan partner dari China, setelah beberapa kali mendapat tindakan kurang fair dari mereka. Namun posisi China saat ini di tataran internasional memang tidak bisa dipungkiri, terlepas dari mentalitas atau kebijakan dalam negeri yang mereka laksanakan. Menurut salah seorang direksi Siemens, Heinrich von Pierer, Resiko menghindari perdagangan dengan China lebih besar daripada resiko ketika terlibat dengannya.

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CHAPTER IV CONCLUSION AND RECOMMENDATION

Indonesia sebagai Negara berkembang merupakan pangsa pasar yg cukup besar. Tidak bisa dihindari perkembangan yg terjadi secara terus menerus membawa Indonesia akhirnya menandatangani perjanjian perdagangan bebas atau lebih sering disebut Free Trade Agreement (FTA). Tepat tanggal 1 Januari 2010 mulai diberlakukan FreeTrade Agreement (FTA/Perjanjian Perdagangan Bebas) ASEAN-China. Negara-begara ASEAN yang termasuk yaitu : Indonesia, malaysia, Singapura, Brunai, Vietnam, Filiphina, Kamboja, Laos, Thailand, dan Myanmar. Adapun hasil kesepakatannya yaitu bea masuk produk manufaktur China ke ASEAN, termasuk Indonesia, ditetapkan maksimal 5 persen, sedangkan di sektor pertanian 0 persen tanpa pajak sama sekali. Harus diakui, dewasa ini segala bentuk perjanjian internasional seakan akan telah memberikan landasan dan harapan baru bagi pembangunan dan pertumbuhan ekonomi yang diarahkan dalam rangka percepatan pengentasan dan penghapusan kemiskinan, terutama bagi negara berkembang dan miskin, termasuk salah satu adalah bangsa Indonesia. Fenomena ini tentulah sangat menarik untuk kita coba telaah lebih dalam, terutama dengan maraknya perjanjian mengenai perdagangan bebas (free trade) yang telah disepakati oleh bangsa Indonesia sebagai salah satu bentuk kebijakan yang telah diambil, dimana mungkin penulis mencoba untuk melemparkan suatu pertanyaan sederhana dalam tulisan ini,

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apakah benar perjanjian-perjanjian yang telah dibuat itu memang diarahkan dalam rangka percepatan pertumbuhan ekonomi sehingga dapat mempercepat

pengentasan kemiskinan yang telah lama menyelimuti bangsa ini atau janganjangan itu hanyalah sekedar pemanis belaka untuk memperkuat proses neokolonialisme dan imprealisme suatu negara terhadap negara lain? Bagi Indonesia sendiri, menurut berita yang saya baca, pasar bebas ASEAN dan China ini dirasakan merugikan bagi kalangan pengusaha lokal, industri lokal dan sektor pertanian. Hal ini dikarenakan persiapan indonesia dalam menghadapi pasar bebas ASEAN-China masih dirasa kurang. Kondisi ini berbeda dengan China yang sudah jauh-jauh hari melakukan persiapan yang matang. Apalagi akhir-akhir ini sebelum pasar bebas diberlakukan, Indonesia sudah dibanjiri produk-produk dari China yang harga dan kualitasnya lebih bersaing dari produk lokal. Ada yang menarik mengapa China bisa menjual produk dengan harga yang bersaing. Hal ini dikarenakan China bukan saja cuma menjadi produsen skala besar, tetapi juga telah membangun sebuah jaringan perdagangan yang kuat dan terpadu di seluruh dunia. Selain itu upah buruh murah dan industri produk massal yang sudah terotomasi meningkatkan kemampuan produksi. Prinsip dari orang-orang China, untung sedikit tidak apa-apa, asalkan dagangan bisa cepat laku dan kontinu. juga telah menanamkan tingkat perputaran uang yang cepat. Pada prinsipnya perdagangan bebas atau free trade adalah suatu bentuk penjabaran ekonomi suatu negara yang mekanisme kebijakan perekonomiannya diserahkan kepada kebijakan pasar dengan meminimalkan seminim mungkin

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peran negara bahkan diharapkan sama sekali tidak ada intervensi/campur tangan dari negara. Prinsip ini berpijak pada teori ekonomi Adam Smith, seorang filosof dalam bukunya The Wealth of Nations yang mengharamkan campur tangan pemerintah dalam mekanisme pasar karena pasar akan mampu menggenahi dirinya sendiri. Tangan-tangan tak terlihat akan menciptakan keseimbangan penawaran dan permintaan dalam pasar komoditas maupun pasar surat-surat berharga (pasar uang dan pasar modal). Intinya adalah akumulasi modal dengan keniscayaan memperoleh keuntungan semaksimal-maksimal nya karena pasar mengatur dirinya sendiri. Adam Smith juga dalam bukunya The wealth of nations mengatakan bahwa pada dasarnya manusia adalah homo economicus yang senantiasa mengejar kepentingannya sendiri guna memperoleh manfaat atau kenikmatan yang sebesar-besarnya dari apa saja yang dimilikinya. Kalau karakter manusia yang egosentris dan individualistik seperti ini dibiarkan tanpa campur tangan pemerintah sedikitpun, dengan sendirinya akan terjadi alokasi yang efisien dari faktor-faktor produksi, pemerataan dan keadilan, kebebasan, daya inovasi dan kreasi berkembang sepenuhnya. Hal ini bisa dilihat dari, kalau seandainya ada barang dan jasa yang harganya tinggi sehingga memberikan laba yang sangat besar (laba super normal) kepada para produsennya maka akan mengundang ketertarikan banyak orang untuk memproduksi barang yang sama. Akibatnya supply meningkat dan ceteris paribus harga turun, dan begitu juga seterusnya. Maka dengan prinsip seperti ini penganut paham inipun menyakini bahwa kemakmuran dan kesejahteraan masyarakat akan datang dengan sendirinya.

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Selain itu, perdagangangan bebas juga menyakini akan menciptakan kemakmuran bersama semua bangsa yang disebabkan setidaknya oleh tiga hal yaitu pertama, perdagangan akan menyebabkan Negara-negara melakukan spesialisai dalam produksi setiap item dimana mereka secara relative lebih efesien. Inilah yang oleh David Ricardo (salah satu peletak dasar teori ekonomi klasik) sebagai teori Comparative Advantage. Sebaliknya, pada sisi koin mata uang yang sama, pembatasan perdagangan atau distorsi cenderung menurunkan allocative efficiency. Yang kedua perdagangan bebas akan menghasilkan efficiency from competition, yang berarti bahwa dengan terlibat dalam aktivitas perdagangan bebas pemerintah harus mendorong perusahaan-perusahaan domestik untuk bertarung di pasar global, dan kemudian memaksa mereka agar lebih inovatif. Dengan demikian, pada akhirnya perusahaan-perusahaan domestik tersebut akan menjadi lebih efesien. Hasil akhirnya, kompetisis akan melahirkan harga barang yang lebih murah dan pelayanan terhadap konsumen yang lebih baik. Ketiga, perdagangangan juga melahirkan apa yang disebut imported efficiency, dalam artian bahwa pemerintah mau tidak mau harus membuka pasarnya terhadap investasi asing atau impor teknologi asing dengan harapan akan membawa metode proses produksi yang lebih efesien. Kita tidak bisa menghindar dari pasar bebas tersebut, namun seharusnya pemerintah juga harus melindungi industri lokal dalam negeri. Kebijakan-kebijkan yang menguntungkan industri lokal juga harus dikeluarkan, investor diundang dan ditingkatkan, dan tentu saja bagi kita sebagai warga negara Indonesia kita harus

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menanamkan sikap untuk selalu menggunakan produk dalam negeri karena sebenarnya produk kita tidak kalah dengan produk asing, dan tentu saja akan membantu perekonomian negara kita. Melihat kembali sepanjang tahun 2010 lalu , masih sekitar 30% saja pelaku usaha yang siap berkembang untuk bersaing dengan produk impor. Kemampuan pelaku usaha tersebut diikuti dengan keberanian mengajukan pinjaman permodalan ke pihak perbankan. Sedangkan untuk pemasarannya, perlu adanya persiapan khususnya dalam mentalitas pelaku usaha. Sebab, banyak yang telah beralih fungsi dari pelaku usaha menjadi pedagang dan tidak sedikit yg gulung tikar atau mengalami kebangkrutan. Pentingnya mengembangkan diri pelaku usaha harus membentuk komunitas agar dapat menghasilkan produk yang siap bersaing dengan kualitas tinggi namun dengan harga yang bersaing dan relatif murah dibandingkan produk impor. Menghadapi persaingan pasar bebas tidak dapat dilakukan sendiri saja, tapi harus bergabung dengan pelaku usaha lainnya sehingga permasalahan modal dan promosi dapat ditanggulangi. Dari tahun 2009 kita telah persiapkan datangnya AFTA itu, khususnya dalam persiapan mentalitas pelaku usaha. Namun, memang tidak banyak yang mampu bertahan dan Pelaku usaha kita belum siap dalam modal dan promosi. Apalagi menghadapi persaingan pasar bebas, produk lokal harus mempunyai legalitas mutu sehingga bisa dan mampu bersaing, Untuk menggairahkan para pelaku ekonomi dari dalam negeri diperlukan dukungan dari pemerintah dalam hal memberikan kemudahan dalam pengurusan izin. Jadi diharapkan Negara kita dan para pelaku ekomoni didalamnya dapat

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memenangkan pasar bebas ini dan memberikan dampak yg positif, peningkatan perekonomian rakyat. Menjadikan pasar bebas ini peluang baik bagi para pengusaha dalam negeri untuk bisa meningkatkan industri dalam negeri.

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Industry, value added (% of GDP) | Data | Table. (n.d.). Retrieved September 26, 2010, from The World Bank: http://data.worldbank.org/indicator/NV.IND.TOTL.ZS Landsburg, S. E. Price Theory and Applications. Mankiw, G. (2004, March 25). Greg Mankiw's Blog: Outsourcing Redux. Retrieved from Greg Mankiw's Blog: http://en.wikipedia.org/wiki/Free_trade#cite_note-15 National Bureau of Statistics of China. (n.d.). Retrieved September 30, 2010, from National Bureau of Statistics of China: http://www.stats.gov.cn/english/ Qiaoyi, L. (2009, December 30). Global Times - New Year, new ASEAN free trade bloc. Retrieved from Global Times: http://business.globaltimes.cn/chinaeconomy/2009-12/495249.html Soderbaum, P. P. (2007, September). Post-Autistic Ecnomics Review. US-China Trade Satistics and China's World Trade Statistics. (n.d.). Retrieved August 26, 2010, from US-China Business Council: http://www.uschina.org/statistics/tradetable.html World Bank Group. (2008, April 22). Indonesia: Economic And Social Updates. World Bank Document , 44273 . The World Bank.

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