An Analysis of the Indonesian Balance of Trade Before and After Implementation of the ASEAN China Free Trade Area (ACFTA)
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Abstract
The aim of this research study was to show whether the implementation of ASEAN-China Free Trade Area (ACFTA) contributes advantages or disadvantages in the Indonesian context by statistically analyzing the balance of trade using t-test (paired t-test) and trend line analysis. The sampling technique of this study was the total exports and imports of Indonesia to and from Brunei Darussalam, China, Malaysia, the Philippines, Singapore, and Thailand from January 2005 to 2014. Data was obtained from the official website of the Indonesian Central Bureau of Statistics. The study found that there was a significant relationship between the Indonesian Balance of Trade before and after implementation of the ACTFA; the result of a 2-tailed test was a value of 0.035. Furthermore, a linear regression line showing the Balance of Trade before and after ACFTA became steeper after the implementation of ACFTA, showing that the Indonesian trade deficit between exports and imports widened after ACFTA. What may be deduced from these findings is that free trade under ACFTA did not improve Indonesia’s Balance of Trade; instead, its trade performance worsened after implementation of ACFTA.
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