ASEAN-Kanada Free Trade Agreement (FTA): Peluang Bagi Indonesia

At the 8th ASEAN Economic Senior Review Official Meetings (SEOM) in Laos, ASEAN and Canada committed to conduct a feasibility study within the framework of ASEAN-Canada FTA. This study aims to measures the impact of ASEAN-Canada FTA implementation to Indonesia using Computable General Equilibrium (CGE) model – the 9th version of Global Trade Analysis Project (GTAP). The study run three different simulations (1) Indonesia joining the ASEAN-Canada with a 90% tariff reduction applied to all goods adopting ASEAN modality in Regional Comprehensice Economic Partnership (RCEP); (2) 90% Tariff reduction without Indonesia joining the ASEAN-Canada FTA, (3) improving trade facilitation and decreasing 20% non-tariff measures. Simulation result shown that from Macroeconomic perspective, Indonesia will get positive impact of increasing 0.03% GDP by joining the FTA instead of not joining. Indonesia will get higher impact by increasing trade facilitation and 8.53% investment and reducing 3.35% of NTM. Based on the results, the declining output and increasing import is dominated by import of raw materials and capital goods, therefore import of raw material remain important. This study recommended reducing tariff and NTM as well as improving trade facilitation are necessary for Indonesia.