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Impact of Trade Liberalization Asean-China Free Trade Area (ACFTA) on the Performance of Indonesia Maize Economy

August 28th, 2013 No comments

Impact of Trade Liberalization Asean-China Free Trade Area (ACFTA) on the Performance of Indonesia Maize Economy

Yudi Ferrianta1, Nuhfil Hanani,  Budi Setiawan,  and Wahib Muhaimin

 

ABSTRACT

This study aims to analyze the impact the ASEAN-China Free Trade  Area (ACFTA) agreement on  performance of Indonesia maize economy and to find out alternative policies within the maize self-sufficiency  framework. This research uses an econometric model with a simultaneous equations system. Parameter  estimation used is Two Stages Least Squares (2SLS). Forecasting the performance of Indonesia maize economy  and the search for policy alternatives in 2010-2015 ACFTA eras is performed using ex ante simulation. The  implementation trade liberalization agreements of ASEAN-China Free Trade Area (ACFTA) have  negative  impact on Indonesia maize economy. Indonesia does not have a policy package that can be used as a policy  instrument for Indonesia maize self-sufficiency. Effective policy is to ban the import, but IT is difficult to do  because contradict with ACFTA agreement. If Indonesia ‘should’ make maize self-sufficiency, then the policy  that needs to be done is policies combination to increase acreage of 6.29% per year, to increase productivity  3.5%, and to increase raise maize prices by 4:47% through price subsides.
Keywords: ASEAN-China Free Trade Area (ACFTA), maize, simulation  jurnal internaional yudi