The Effect of IJ-EPA to Indonesia Export: Interupted Time Series (ITS) Approach

  • Yuafanda Kholfi Hartono Directorate General of Customs and Excise
  • Sumarto Eka Putra Center for Policy Analysis and Harmonization, Ministry of Finance, Indonesia
Keywords: IJ-EPA, Indonesia, Japan, FTA, Export

Abstract

Indonesia Japan Economic Partnership Agreement (IJ-EPA) is a bilateral free-trade agreement between Indonesia and Japan that has been started from July 1st, 2008. After more than a decade of its implementation, there is a question that we need to be addressed: Does liberalization of IJ-EPA make Indonesia’s export to Japan increase? This question is important since the government gives a trade-off by giving lower tariff for certain commodities agreed in agreement to increase export. Using Interrupted time series (ITS) analysis based on time-series data from Statistics Indonesia (BPS), this article found that the impact of IJ-EPA decreased for Indonesia export to Japan. Furthermore, this paper proposed some potential commodities that can increase the effectiveness of this FTA. The importance of this topic is that Indonesia will maximize the benefit in implementing of agreement that they made from the third biggest destination export of their total export value, so it will be in line with the government's goal to expand export market to solve current account deficit. In addition, the method that used in this paper can be implemented to other countries so that they can maximize the effect of Free Trade Agreement, especially for their export.

Author Biographies

Yuafanda Kholfi Hartono, Directorate General of Customs and Excise

Yuafanda Kholfi is a data analyst at Directorate of Customs and Excise, Indonesia Customs and excise. He earned his master degree from American University Washington DC.

Sumarto Eka Putra, Center for Policy Analysis and Harmonization, Ministry of Finance, Indonesia

Sumarto Eka Putra is a senior analyst at Center for Policy Analysis and Harmonization, Ministry of Finance - Indonesia. He earned his master degree from University of Illinois at Urbana-Champaign, USA.

Published
2020-08-11