Indonesia Case Study

2.3 Indonesia’s International Trade

International trade has become one of the most important things to do for the economy of a country. There are two ways to do the agreement, bilateral trade and multilateral trade. The first one, bilateral trade is the trade happens between two people, groups or countries. The trade can be in political, economic, or military matters. On the other hand, multilateral trade is a free trade between two or more countries at the same time. This trade aim to promote, enhance, and regulate trade in equal manner.

There are examples of bilateral trade of Indonesia with several countries, such as United States, Australia, Japan, China, ASEAN,and the European Union. The relations between Indonesia and the U.S. is important

This trade had come into effect after five years,which is on 1 July 2008. The agreement was made to improve the crosss-border flow of goods as well as the investment between countries. Such commerce liberalization, including the rule of import duties for most export products, was planned to advantage for both countries. The IJEPA was also intended to make broader cooperation with ASEAN agreements, APEC, and the WTO Doha Agenda. According to Indonesia Investment (2015), this trade agreement may be review again in the next future and to raise Indonesia economic expansion to 7 percent by the end of 2019, which was design to increase Indonesian exports to Japan and to bring Japanese FDI into Southeast sia’s largest economy. Although there is a declined in recent years, Japan’s firms still have investments with around 1,000 Japanese companies operating in Indonesia (David

The PCA is an agreement in many sectors, for instance migration, education, energy, and custom cooperation partner. The trade flow of goods were worth 14.3 billion European dollar for the EU and 9.7 billion European dollar for Indonesia. Foreign Direct Investment (FDI) reported that the EU ranked as the third largest investor in Indonesia in 2012, with 1.8 billion European dollars revenue. The products which Indonesia exported to the EU were 19 percent of cleavage products, 9.3 percent electrical and electronic equipment, 8.4 percent textiles, 8.3 percent rubber, and 49.7 percent others. On the other hand, the products exported by the EU to Indonesia were 28.5 percent machinery, 13 percent electrical and electronic equipment, 6.5 percent articles of iron or steel, 4.9 percent vehicles other than railway and