TRADE FACILITATION AND THE PERFORMANCE OF INDONESIAN MANUFACTURING EXPORT

This paper analyzes the impact of trade facilitation on Indonesian manufacturing export performance. Some specific data of Indonesia and thirty countries as Indonesian main trading partners of manufacture commodities over the period 2010 to 2014 were used to construct trade facilitation indicators, including measures in the customs and regulatory environment, port efficiency, and service sector infrastructure. The relationship between Indonesian export performance and these indicators were estimated using a gravity model with panel data. The findings provide some evidence that trade facilitation on customs environment of Indonesia and its trading partners largely and positively affects Indonesian manufacturing export performance, while the Indonesian regulatory environment deters the trade flows. Trade partnerships with ASEAN countries positively and significantly affect Indonesian manufacturing export performance. It is suggested for policy implication to prioritise efforts and development on Indonesian customs environment and its trading partners, through time and cost efficiency to trade. Moreover, Indonesia should generate more trade within ASEAN region which could stimulate a higher export performance.