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Indonesia Manufactures: Would It be Trade Competition or Complement to China, Japan and Korea under ASEAN Plus Three?

Economic Journal of Emerging Markets

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Title Indonesia Manufactures: Would It be Trade Competition or Complement to China, Japan and Korea under ASEAN Plus Three?
 
Creator Santoso, Rokhedi Priyo
 
Description Free trade agreement of ASEAN Plus Three will effectively be implemented in 2010. The establishment of the free trade area will facilitate the realization of potential intra-trade as well as increasing competition of Indonesian products especially manufactures which are intensively traded with the Three. This paper is aimed at analysing the potential trade com-petition and trade complement of Indonesia manufactures to China, Japan, and Republic of Korea under that agreement. Manufactures data used are 3 digits SITC 6 between 1996 and 2006, inclusively. For that purpose, this paper employs an export similarity index (ESI) to identify competitive trade relation; and intra-industry trade index (IIT) to determine com-plementary trade relation. The main finding is that Indonesia and China has more competi-tive trade relation for all categories of manufactures. Both countries have greater similarity in their export structures than that of Japan and Republic of Korea. Conversely, Indonesian manufactures industries have higher complementary trade relation with Japan than with China or Republic of Korea. Thus, forming free trade area between ASEAN and the Three would bring potential competition challenge from China as well as opportunity of intra-industry trade expansion especially from Japan. Keywords: Trade Complementary, Trade Competition, Export Similarity Index, Intra Indus-try Index
 
Publisher Universitas Islam Indonesia
 
Contributor —
 
Date 2009-03-27
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://journal.uii.ac.id/index.php/JEP/article/view/225
10.20885/vol13iss2aa225
 
Source Economic Journal of Emerging Markets; Volume 13 Issue 2, 2008: Indonesian Version
2502-180X
2086-3128
 
Language eng
 
Relation http://journal.uii.ac.id/index.php/JEP/article/view/225/221