Striking a Trade Deal With President Trump? an Assessment of The Potential of Bilateral Free Trade Agreement (FTA) between the Republic of Indonesia and the United States of America


  • Ranti Yulia Wardani
  • Patrick Ziltener
  • . .





Bilateral trade, FTA, Indonesia, United States of America.


The US President Donald Trump announced that US would have some bilateral trade consent, as averse to multilateral trade deal such as the Trans-Pacific Partnership (TPP). This research study investigates empirically the economic potential of bilateral Free Trade Agreement (FTA) between Indonesia and the US. The goal is to calculate the maximum savings potential for exporters. The savings potential is defined as duties that have been paid by any WTO exporter countries to another country based on the combination of its exports and the duties that  not reduce at FTA based. The “maximum savings†is the  from the presumption of all export products from the country origin will have zero tariff to enter another country who have an FTA. By using this measurement, country could have ex ante scenarios close to the real calculation tariff without FTA. The data is collected from the UNCOMTRADE and applied tariff rate (ATR) from the WTO. In this research, the level of analysis is the Harmonized System Code (HS Code) 6 digit level. The research findings show that duties of foodstuffs (HS Code 16-24) Indonesian import from the US is the biggest duties compare to other import item products. On the other side the biggest duties export from Indonesia to the U.S is mainly textile (HS Code 50-63). Therefore, the potential  saving from striking a trade deal would be considerable for both side countries. This research study gives more insight about the savings potential for mutual trade bilateral agreement for both countries. Once both countries agree on trade deal, it would encourage more export, raise the competitiveness level for some companies then lead to the economic growth.





style='mso-spacerun:yes'> ADDIN EN.REFLIST

field-separator'>[1] Urata S. The Rise of Protectionism and Japan's Trade Policy. 2017.

[2] Fergusson IF, McMinimy MA, Williams BR. The Trans-Pacific Partnership Negotiations and Issues for Congress The Trans-Pacific Partnership Negotiations and Issues for Congress. Congressional Research Service. 2015:1-55.

[3] Holland S. Trump says plans lots of bilateral trade deals with quick termination clauses. wwwreuterscom. 2017.

[4] Fardah. Indonesia remains optimistic about bilateral ties with the US. 2017.

[5] Vanhnalat B, Kyophilavong P, Phonvisay A, Sengsourivong B. Assessment the effect of free trade agreements on exports of Lao PDR. International Journal of Economics and Financial Issues. 2015;5(2):365-76.

[6] Calmy-Rey M, Leuthard D. Bilateral agreements Switzerland–EU 1. 2009.

[7] Korneliussen T, Blasius J. The Effects of Cultural Distance, Free Trade Agreements, and Protectionism on Perceived Export Barriers. Journal of Global Marketing. 2008;21(3):217-30.

[8] Beine M, Coulombe S. Economic integration and the diversification of regional exports: Evidence from the Canadian-U.S. free trade agreement. Journal of Economic Geography. 2007;7(1):93-111.

[9] Beverelli C, Neumueller S, Teh R. Export Diversification Effects of the WTO Trade Facilitation Agreement. World Development. 2015;76:293-310.

[10] Cestepe H, Yıldırım E, Bahtiyar B. The Impact of Trade Liberalization on the Export of MENA Countries to OECD Trade Partners. Procedia Economics and Finance. 2015;23(October 2014):1440-5.

[11] Ziltener P. The Free Trade and Economic Partnership Agreement (FTEPA): An Evaluation of its Utilization By Swiss and Japanes Companies (2009-2014). 2016.

[12] United Nations Conference on T, Development. Generalized System of Preferences Handbook on The Scheme of the European Community. New York & Geneva2008. 1-244 p.

[13] World Customs O. What is the Harmonized System (HS)?

[14] Comtrade UN. UN Comtrade Database. 2017.

[15] World Trade O. Trade and tariff data. 2017.



View Full Article:

How to Cite

Yulia Wardani, R., Ziltener, P., & ., . (2018). Striking a Trade Deal With President Trump? an Assessment of The Potential of Bilateral Free Trade Agreement (FTA) between the Republic of Indonesia and the United States of America. International Journal of Engineering & Technology, 7(3.21), 125–134.
Received 2018-08-08
Accepted 2018-08-08
Published 2018-08-08