Balance Of Trade Analysis Before And After The Implementation Of Acfta-Indonesia

Abstract

Free trade does not always bring advantage. It could be benefit or threat for a country. ACFTA is one of the International Free Trade with the acronym ACFTA stands for ASEAN-China Free Trade Area, implemented since January 1, 2010 in countries of China and six out of ten ASEAN members namely Indonesia, Malaysia, Singapore, Thailand, Philippines and Brunei Darussalam with agreement through the elimination of trade barriers such as quota and import tariff. Could it be a positive or negative trigger in a country?
The research aims is to show whether the implementation of ACFTA contributes advantage or disadvantage in Indonesia by analyzing balance of trade statistically using t-test (paired t-test) and trend line analysis picturing balance of trade impact clearly. And the sampling technique of this study is the total export and import of Indonesia from and to China, Malaysia, Singapore, Thailand, Filipina, and Brunei Darussalam from January 2005 to 2014. Sources of data are obtained from legal website of Central Bureau of Statistics of Indonesia.
The empirical study shows that balance of trade before and after the implementation of ACFTA was negative statistically, ACFTA had no strong correlation with performance, and yet, though the correlation was weak, the present of ACFTA had impact triggering 36 percent performance. Linear regression line both before and after ACFTA moves from left to right every year. And the line is more steeply after the implementation of ACFTA. Moreover, the difference of export-import was much bigger after ACFTA. It could be said that Free Trade of ACFTA did not enhance a positive balance of trade in Indonesia. The phenomenon indicates that the balance of trade performance is getting worse after the implementation of ACFTA.