how to measure bilateral economic relations? case … · 2020. 12. 12. · cptpp, and indonesia...

December 2020LPEM-FEBUI Working Paper - 056 ISSN 2356-4008

HOW TO MEASURE BILATERAL ECONOMIC RELATIONS?

CASE OF INDONESIA – AUSTRALIA

Kiki Verico

LPEM-FEB UI Working Paper 056

Phone : +62-21-3143177

Email : [email protected]

Universitas Indonesia (LPEM-FEB UI)

Web : www.lpem.org

Chief Editor : Riatu M. Qibthiyyah

Setting : Rini Budiastuti

© 2020, DecemberInstitute for Economic and Social Research

Fax : +62-21-31934310

Faculty of Economics and Business

Editors : Kiki Verico

Salemba Raya 4, Salemba UI Campus Jakarta, Indonesia 10430

LPEM-FEB UI Working Paper 056, December 2020ISSN 2356-4008

How to Measure Bilateral Economic Relations?Case of Indonesia – AustraliaKiki Verico1,F

AbstractIndonesia and Australia had agreed to seal the deal for a bilateral economic agreement entitled Indonesia-AustraliaComprehensive Economic Partnership Agreement (IA CEPA). After about ten years since both countries committedto having a bilateral agreement, IA CEPA had entered into force on July 5th, 2020. This paper has two aims. Firstly,assessing potential trade and long-run investment relations with the combination of RCA (Revealed ComparativeAdvantage) and CMSA (Constant Market Share Analysis) with ToT (Terms of Trade) and Net Export (NX) as thefilter. Secondly, measuring the potential impacts from tariff rate elimination utilizing the GTAP (Global Trade AnalysisProject) model. This paper finds that both countries have complementarity relations that Indonesia can gain to improvemanufacturing productivity, and Australia can benefit from sunrise to sunset relations. This paper proves that CEPAmatches their need to increase their economic benefits, revealed that they could share mutual benefits and sustainableeconomic relations.

JEL Classification: D58; F14; F21; O24

Keywordsbilateral country studies — trade policy — CGE GTAP — FDI analysis — Indonesia Australia

1Institute for Economic and Social Research (LPEM) Faculty of Economics and Business, Universitas Indonesia (FEB UI)FVice Director of the LPEM Faculty of Economics and Business of Universitas Indonesia (FEB UI), Assistant Professor at the FEB UI andcurrently work as an Advisor for Industry and International Trade to the Finance Minister of Republic of Indonesia. Email:[email protected]; [email protected].

1. Introduction

1.1 BackgroundAfter about ten years of negotiation, a standard averageperiod for trade negotiation, Indonesia and Australia havean effective come in force of the bilateral economic agree-ment. Not only cover trade issues, but this arrangementalso figures long-term investment; therefore, it is named acomprehensive economic partnership agreement. Indone-sia and Australia’s economic relations have increased sinceIndonesia entered the reform era, starting with more inten-sive diplomatic visiting and conversation (Resosudarmoet al., 2015). Indonesia and Australia started to talk aboutthe plan to directly bilateral agreement for the buildingblock of the ASEAN-Australia-New Zealand Free TradeArea (AANZFTA) in 2010. In 2016, there was a reportentitled Shaping the Indonesia Australia CEPA (Compre-hensive Economic Partnership Agreement)1 which assessboth the current facts and expectation outcome of this bilat-eral economic cooperation. Positive expectation and sharingenthusiasm on this bilateral have increased until it comesinto force in July 2020.

As for the economic cooperation, in addition to theWTO, Indonesia and Australia are together under severaleconomic agreement frameworks such as the Cairns Group,which consists of twenty powerful agricultural exportingcountries, the APEC (Asia-Pacific Economic Cooperation),

1The report was provided by the Australia Indonesia Busi-ness Council, other news can be found in The LacklustreAustralia-Indonesia Economic Relationship - Future DirectionsInternational: https://www.futuredirections.org.au/publication/lacklustre-australia-indonesia-economic-relationship/.

the RCEP (Regional Comprehensive Economic Partnership)which just officially signed in November 15th, 2020, theEast Asia Summit, G20 Forum, and others. However, bothcountries do not have bilateral economic cooperation andneed to build development program arrangements and tradeagreements, but Indonesia and Australia also share the sameinterest in trade and investment cooperation. Along with thisneed, the world has become more fascinated with bilateraleconomic cooperation with more comprehensive coverages.In 2010, the era of bilateralism was born to compete withmega regionalism in the Comprehensive and ProgressiveAgreement for Trans-Pacific Partnership (CPTPP) and theRCEP. Bilateral CEPA becomes the most practical optionfor two countries that would like to enhance their economicrelations from trade to investment and improve their pro-ductivity without worrying about multilateral pressures.

Before the IA-CEPA come into force, Indonesia hadfinalized three bilateral economic agreements with Japan(Indonesia-Japan Economic Partnership Agreement/IJEPA)in 2007, Pakistan (Indonesia-Pakistan Preferential TradeAgreement/IPPTA) in 2012, and Chile (Indonesia-ChileCEPA) in 2019.

Unlike the PTA, bilateral CEPA covers trade in goodsand services and long-run investment relations. The eco-nomic assessment has to observe trade relations and tradeindicators; other central economic cooperation such as for-eign direct investment inflow and outflow can also be as-sessed (Fukuoka & Verico, 2015). Indonesia needs morecomprehensive bilateral economic cooperation, and Aus-tralia is one of the right partners.

International economic relation covers both trade andinvestment but the agreement can cover either trade (PTA

1

[email protected]@gmail.comhttps://www.futuredirections.org.au/publication/lacklustre-australia-indonesia-economic-relationship/https://www.futuredirections.org.au/publication/lacklustre-australia-indonesia-economic-relationship/

How to Measure Bilateral Economic Relations? Case of Indonesia – Australia — 2/11

and FTA) or trade and investment (EPA and CEPA). Thebilateral economic agreement between Indonesia and Aus-tralia is CEPA; therefore, the core question is, do these twocountries have complementarity relations that can sustaintheir trade and investment relations?

1.2 Research QuestionBased on Indonesia’s need for comprehensive economiccooperation and the fact that Indonesia-Australia CEPAhas come into force, this paper needs to respond to severalquestions:

1. How is Indonesia’s competitiveness by-product?2. What commodities will enhance trade relations be-

tween Indonesia and Australia?3. What commodities will enhance long-run investments

between Indonesia and Australia?4. What are the impacts of Indonesia and Australia’s

CEPA on the economic sectors and factors?

1.3 ObjectiveBased on the research questions above, this paper attemptsto prove:

1. Indonesia’s competitiveness by product2. Commodities that will enhance trade relations be-

tween Indonesia and Australia3. Commodities that will enhance long-run investments

between Indonesia and Australia4. The impacts of Indonesia and Australia CEPA on

their economic sectors and factors

1.4 Specific CoverageThis paper covers bilateral economic (trade and long-run in-vestment) relations between Indonesia and Australia. Thereare several reasons why this paper chooses Indonesia – Aus-tralia economic relations. First, a calculation based on theV-Composite Index Model (V-CIM) (Verico, 2020) showsthat Australia is one of Indonesia’s strategic bilateral part-ners. Besides ASEAN and the EU, seven countries havestrong trade and investment relations with Indonesia. Theyare the USA with V-CIM of 4.7, South Korea of 3.7, UAEand China of 3.4, India and Japan of 3.1, and Australia with2.3 V-CIM. Second, Indonesia and Australia are under thesame mega-regionalism with the ASEAN centrality princi-ple of the RCEP. This bilateral will be a building block forthe RCEP.

Third, Australia is a member of the CPTPP, and In-donesia had intended to join the TPP when the USA wasstill there. Considering the USA presidential election result,there will be an open option that the USA will support theCPTPP, and Indonesia will reconsider joining it afterward.If this happens, the Indonesia-Australia CEPA will be thebuilding block for the CPTPP. This third consideration isIndonesia’s ahead of the curve of thinking in picking howimportant the bilateral economic relations with Australia.Fourth, geographic proximity wise, Australia is one of In-donesian closest neighbouring countries of which mutualbenefit from their economic cooperation will increase theireconomic welfare and enhance diplomatic and political sta-bility between the two countries.

2. References, Indexes and GTAP Model

2.1 ReferencesA study on Indonesia’s trade and investment model in early20202 proved that macroeconomic variables have significanteffect on the strength of bilateral economic relations (Verico,2020). This study adopted 15 macroeconomic variables:GDP, GDP PPP, Economic Growth, Unemployment Rate,Inflation Rate, GDP per Capita, Public Debt to GDP, AnnualBudget Deficit to GDP, FDI Outflows to GDP, AgricultureValue Added to GDP, Agriculture Employment to TotalEmployment, Manufacture Value Added to GDP, Trade inServices to GDP, High-Tech Export to Total ManufactureExport and R&D Expenditure to GDP. This study found asignificant level for each variable using panel data analysis.This significant level is used as the weighted for construct-ing the composite index model from all the variables. Thisstudy proved that Australia is one of Indonesia’s importanteconomic partners for having bilateral economic coopera-tion.

There is always a situation where global political powerchanges from a superpower, yet sunset countries to the sun-rise countries. However, mutual interest with real values andbenefits will make the relations between sunset and sunrisecountries sustain. This is called hegemonic transition succes-sion (Clark, 2011). This paper adopts the dynamic naturaltransition from superpower economic countries to emergingcountries. If high-income and upper-middle-income coun-tries have been adopted, then the economic relationshipbetween Australia as a high-income country and Indonesiaas upper-middle-income countries can complement mutualbenefit and interest as their relationship guidance.

The globalization enthusiasm has increased optimismwithin countries in almost all kinds of cooperation. For in-stance, China and Russia are committed to having moreoptimistic bilateral relations to achieve a common interestwith open, equal opportunities for both countries. A studyof Ferdinand (2007) confirmed that China and Russia haveagreed upon a so-called new relationship. The end of thecold war has contributed to the positive progress of bilat-eral economic relations between Russia and China. It is along way to go, but a more solid bilateral relation worthit to be intensively constructed by both countries. This en-thusiasm is between Russia and China and other countries,including Indonesia and Australia, with IA CEPA. Strongeconomic relations between the two countries will affectthe enthusiasm sharing on many aspects of life for bothcountries towards their bright future. This inspires manybilateral economic relations are constructed nowadays.

The trade complementarity index can indicate the rela-tionship between the two economies (Andreosso-O’Callaghan& Nicolas, 2007). Trade complementarity index helps twoeconomies identify the risk of industries insensitive andpromising sectors. These indicators can define trade and in-vestment links for both economies. Andreosso-O’Callaghan& Nicolas adopted comparative trade advantage and intra-industry indicators to assess complementarity relations be-tween ASEAN and EU regions. They applied intra and

2For further detail: https://waseda.repo.nii.ac.jp/?action=pages view main&active action=repository view main item detail&item id=48377&item no=1&page id=13&block id=21 .

LPEM-FEB UI Working Paper 056, December 2020

https://waseda.repo.nii.ac.jp/?action=pages_view_main&active_action=repository_view_main_item_detail&item_id=48377&item_no=1&page_id=13&block_id=21 https://waseda.repo.nii.ac.jp/?action=pages_view_main&active_action=repository_view_main_item_detail&item_id=48377&item_no=1&page_id=13&block_id=21 https://waseda.repo.nii.ac.jp/?action=pages_view_main&active_action=repository_view_main_item_detail&item_id=48377&item_no=1&page_id=13&block_id=21


inter-regional economic integration concept in assessing therelations. Their studies proposed the sunset and sunrise in-dustries concept as an essential part of the complementarityanalysis.

In the context of sunset industries and the need to in-crease profit through mergers, the study of Nishiwaki (2016)found that divestment with other industries was the rationaloption. As to reduce the cost from the excess of capital dueto the decreasing demand, sunset industries need to do amerger with the industries that performed better. This studyfound that a merger is a solution for the industry to reduceexcess capital problems due to the decreasing demand, yetas it made merger companies have oligopoly power andpotentially reduce consumer surplus power. After merging,this study concluded that sunset industries obtained net ben-efit as both the producer profit and total welfare increased.

2.2 IndexesThis paper adopts Revealed Comparative Advantage (RCA),Constant Market Share Analysis (CMSA), Terms of Trade(ToT) and Net Export (NX). The combination of all in-dicators is used to assess Indonesia’s trade competitive-ness (objective number one). The combination of RCA andCMSA3 is used to assess Indonesia and Australia tradeand long-run investment relations by product of Harmo-nized System 4/HS4 (objective number two and three). Thedata has been adopted from the Trade Map (Trade Map- Trade statistics for international business development:https://www.trademap.org/Index.aspx). The equations are:

RCAi jt =Xi jt/∑i=ni=1 X jtXiwt/∑i=ni=1 X jt

(1)

Where:

i : tradable goods of export (X) from country J in time t;w : world data;n : the latest HS4 tradable goods.

(2)Xi jt1 − Xi jt0 = ∑(Xiw∆t).Xi jt0 − Xi jt0

+ (Xiw∆t − ∑Xiw∆t).Xi jt0+ (Xi jt1 − Xiw∆t .Xi jt0)

Where:

∑(Xiw∆t).Xi jt0 −Xi jt0 : General Factor (CMSA1);(miw∆t −∑miw∆t).Xi jt0 : Composition Factor (CMSA2);(Xi jt1 −miw j∆t .Xi jt0) : Comparative Factor (CMSA3).

This paper uses the RCA and comparative factor (CMSA3)to define whether the product is classified as great industry(RCA>1, CMSA3>0), sunrise (RCA0), sun-set (RCA>1, CMSA31, NX


productive country like Australia is feasible to have com-plementarity cooperation with a relatively big country likeIndonesia. The first way is to share a positive spillover ef-fect on Indonesia’s human capital productivity throughouteducation and health investment. The second way has stabletrade cooperation to boost economic growth: the more sig-nificant the Indonesian economy, the better and more robusteconomic cooperation between Australia and Indonesia.

In the agricultural sector, Indonesia is better in terms ofshare of sector per GDP but much less in productivity thanAustralia. The opposite figure in the service sector, whereasin terms of share to GDP, Australia is higher than Indonesia,but Indonesia is better in productivity. Nevertheless, this hasto be confirmed with informal-formal activities and tradein services. It is clear that trade in services as a percentageto GDP, Australia is better than Indonesia. As the informalsector in Indonesia is dominant, especially during the globalpandemic, which about 60 percent of GDP; therefore, itshows Indonesia’s economy mostly consists of a low value-added service sector. The size of service export in currentUSD also confirmed that Australia’s service sector is moreglobally competitive than Indonesia’s service sector (seeTable 1).

Indonesia has higher productivity in the service sectorand manufacture than of Australia, but this indicator has tobe confirmed with Indonesia’s tradable goods’ quality. Thispaper describes Indonesia’s quality of tradable products byHS4 indicated by the Terms of Trade (ToT). This indicatorhas been completed with net export (NX) value indicatorand classified as elegance, increase, decrease, and poor.The combination of ToT and NX is useful for preliminaryassessment of the quality of the product. The manufacturingsector in Indonesia is relatively in better performance thanthat of Australia. This is an ample opportunity for Indonesiato receive investment from the sunset Industry in Australiato Indonesia’s sunrise industry. The next chapter this chapterwill discuss which products that meet this criterion.

Before having the quantitative analysis of potential bi-lateral economic cooperation between Indonesia and Aus-tralia, this paper explains Indonesia’s competitiveness byHS4 product with a combination of four indexes: RCA,CMSA, ToT, and NX.

In the observation period from 2015 to 2019, in 1,257HS4 products observed, Indonesia has 150 products withgreat category, and 50 of them are classified as elegance.These are products that potentially become the most at-tractive products for long-run investment (FDI inflows),including for Australian investors (see Table 2).

Indonesia has 34 HS4 products classified as sunrise andincreases, which means even RCA and ToT less than one,but CMSA3 and Net Export are positive. These will be thenext Indonesian absolute advantage products (see Table 3).

Indonesia needs to pay attention to 16 HS4 productsexperiencing both the sunset and decrease situation. Thismeans that they are experiencing difficulties either due tothe decreasing demand, increasing competition from othercountries, or a combination of the two (see Table 4).

Finally, Indonesia has 313 HS4 products that are bothsuffer and poor, which means RCA and ToT less than one,and CMSA3 and Net Export are negative. Indonesia needsto pay attention to these products, especially because the

number of this classification is more than that of great andelegance. It shows that Indonesia has many absolute advan-tages (150 of 1,257 products) but at the same time has 313products with absolute disadvantage condition.

Indonesia has 1,257 HS4 products, of which 413 prod-ucts are matched between the classification of great, sunrise,sunset, suffer and classification of elegance, increase, de-crease, and poor. This means 844 products out of 1,257 or67 percent of products are not matched. This means thatmajority, Indonesian industries’ conditions different fromtheir quality. It can be industry is classified as a sunrise, butits product quality is classified as decrease and the oppositeor the industry status is sunset, but its product quality statusis the increase.

4. Quantitative Analysis: RCA-CMSAand GTAP Simulation

From 1,257 HS4, this paper finds that 2 percent (25 prod-ucts) do not have complete information. In 1,232, the ma-jority Indonesia products is suffer (584), followed by sun-rise (387), great (150), and sunset (111). Australia also hassimilar patterns of which dominant classification is sufferindustry (581) and followed by sunrise (535), great (64),and sunset (52). Further details in Table 5. The significantdifference is in the classification of sunrise that its numberis ten times than that of sunset, whereas, in Indonesia, asimilar ratio is only about 3.5 times. This indicates that Aus-tralia is better at maintaining its manufacturing performanceand nurturing them at the same time.

The comparison between Indonesia and Australiafrommacroeconomic variables is in line with the competitivenessanalysis by HS4 dataset. As shown in the comparison ofincome per capita level, Australia, in terms of productivitylevel and its ability to secure it, is better than Indonesia. Thismeans economic cooperation between Indonesia and Aus-tralia has to create a positive spill over effect on the increaseof knowledge, know-how, cooperation in technology, andresearch and development. Indonesia needs to learn fromAustralia on how to improve its productivity and transformits product quality.

Given this consideration, other relations are feasible juston trade (export and import); nevertheless, special on invest-ment purposes as the core of knowledge transfer, Indonesiaand Australia should focus on sunset – sunrise classifica-tion. Considering the current situation that Australia is at ahigh-income level while Indonesia is at the bottom level ofupper-middle-income, the long-run investment can followthe non-mainstream approach. Usually, the sunset industryin one country invests in the sunrise industry in anothercountry. Considering that Australia is having a more high-income level than Indonesia, the investment flows shouldcome from the other way around, which is the sunrise in-dustry in Australia to the sunset industry in Indonesia andthe opposite.

In order to have a complete set of information for thesunrise and sunset relation, it has to be completed with prod-uct quality information. This paper proposes that productquality of elegance is used as the filtering for the sunriseand sunset relations. Indonesia has 23 HS2 products thatcan receive long-run investment from Australia as FDI in-



flows, while Australia has 17 HS2 for FDI Outflows fromIndonesia to Australia. This paper provides the list of 23HS2 products that potential to receive FDI inflows fromAustralia in Table 6 and 17 HS2 products that potential forIndonesian investors to invest in Australia in Table 7.

Labor-intensive products are mostly potential productsfor Australia to invest in Indonesia, such as clothing andfootwear. Other potential products are jewelry, copper wire,electrical capacitors, furniture, and musical instruments. In-donesia can invest in Australia in food and dairy-relatedproducts such as meat, cheese, flours, and wheat gluten.Indonesia can apply buyback investment as most of In-donesia’s imports are food-related products. Other potentialproducts are in mining, such as zinc, peptones, aluminum,and nickel.

As for the impacts of this bilateral economic cooperationto sectors and factors of development, this paper applies theGTAP model with the simulation of trade liberalization of atariff rate reduction of both countries one by one. This paperuses the tariff rate of MFN, of which Indonesia has 8.29percent, and Australia has 3.04 percent. This paper analysesthe impacts on both the sectors and factors (Table 8 to Table11). The GTAP model shows that Australia will obtain asurplus in the service sector, light manufacturing, and labor-intensive, while Indonesia will benefit from food-relatedproducts, light, and heavy manufacturing.

The GTAP simulation shows that Indonesia receivesmore benefit from the trade balance while Australia willbenefit from the investment. As for the price of supply, Aus-tralia’s impact is higher than in Indonesia. This confirms thatbilateral Indonesia-Australia cooperation will be increasingproductivity in Australia since the price and productivity(marginal productivity of labor/MPL) have an inverse re-lation. This paper finds that Indonesia and Australia havecomplementary economic relations, potentially generatingmutual benefit for both countries. Indonesia and Australiacan share mutual benefits in trade and investment and agri-culture, manufacturing, and service sectors. The economicimpacts on sectors and factors are higher when Indonesiareduces its import protection than the other way around ifAustralia diminishes it.

5. Conclusion

There are several valuable conclusions which taken frompaper:

a. Referring to macroeconomic indicators’ comparison,Indonesia and Australia are at a different level. Inthe simple indicator, Australia is in a high-incomecountry while Indonesia just entered the upper-middleincome level. This paper provides more detailed indi-cators of sectors (agriculture, manufacture, service),trade (export), and factor of production (employmentand productivity) and confirmed that Australia ismore productive with high value-added economicactivities and Indonesia has a comparative advantagein the size and small-medium economic activities.

b. This paper applies RCA and CMSA3 to define theclassification of great, sunrise, sunset, and suffer. Italso applies ToT and NX to identify the quality andcurrent net trade balance of the product. This study

uses the HS4 level, which consists of 1,257 productswith complete information about 1,232 products. Thisstudy confirms the deindustrialization problem in In-donesia since 76 percent of its industry is sufferingand poor, and the rest is either great and elegance (12percent), sunrise and increase (8 percent), and sunsetand decrease (4 percent).

c. This paper combines RCA and CMSA3 Indonesiaand RCA and CMSA3 Australia to find the industry’sstatus for each country. It focuses on sunrise and sun-set relation to define investment flows, and the restare classified as trade relations. This paper finds 23products of HS4 in Indonesia that are classified assunset and elegance while in Australia, these prod-ucts are classified as the sunrise. These are productsthat potential to receive FDI inflows from Australia.They include labour-intensive products such as cloth-ing and footwear, mining such as jewellery and cop-per wire, low to medium technology such as electricshavers, electric capacitors, musical instruments, fur-niture and tableware, school equipment, pencils andbooks, and drawing parts. This paper also finds 17products of HS4 in Australia that potentially receiveinvestment from Indonesia because the combinationrelation is sunrise and sunset. They are food-relatedproducts (meat, cheese/dairy, wheat, flours), whichare dominant in Indonesian imports and mining prod-ucts such as zinc ores, inorganic colouring, nickel,and aluminium.

d. This paper applies the GTAP10A model to simulatethe impacts of bilateral economic cooperation of In-donesia and Australia. This paper finds that Australiawill benefit from textile and apparel, light manufac-turing, and service sectors, while Indonesia will gaingrain crops, meat, processed food, light and heavymanufacturing. These GTAP simulation results aresimilar to the analysis of combination (RCA andCMSA3) of sunset to sunrise investment flows ex-cept for the service sector as non-tradable sectorsbeyond the HS4 classification.

e. This paper concludes that economic cooperation be-tween Indonesia and Australia is complementarityand meets trade investment relations; therefore, CEPAmode matches the two countries’ needs. This bilateraleconomic cooperation will increase both countries’economic gains, mutual benefit for all, and sustain-ability afterward.

References

Andreosso-O’Callaghan, B., & Nicolas, F. (2007). Are theeconomies of ASEAN and the EU complementary?. ASEANEconomic Bulletin, 24(2), 205-224.

Clark, I. (2011). China and the United States: a successionof hegemonies?. International Affairs, 87(1), 13-28. doi:https://doi.org/10.1111/j.1468-2346.2011.00957.x.

Ferdinand, P. (2007). Sunset, sunrise: China and Russia constructa new relationship. International Affairs, 83(5), 841-867. doi:https://doi.org/10.1111/j.1468-2346.2007.00659.x.

Fukuoka, Y., & Verico, K. (2015). Indonesia–China eco-nomic relations in the twenty-first century: Opportunitiesand challenges. In Y. C. Kim (eds), Chinese global produc-



tion networks in ASEAN (pp. 53-75), Springer, Cham. doi:https://doi.org/10.1007/978-3-319-24232-3˙4.

Nishiwaki, M. (2016). Horizontal mergers and divestment dynam-ics in a sunset industry. The RAND Journal of Economics, 47(4),961-997. doi: https://doi.org/10.1111/1756-2171.12161.

Resosudarmo, B. P., Verico, K., & Pasaribu, D. H. (2015). Evalu-ating the importance of Australia-Indonesia economic relations.In A. Missbach & J. Purdey (eds.), Linking people: Connec-tions and encounters between Australians and Indonesians (pp.47-70), Regiospectra.

Verico, K (2020). The weighted composite index analysisof Indonesia’s bilateral economic agreements. Journal ofAsia–Pacific Studies, 38(Special Issue for the Retirement ofProfessor Shujiro Urata), 121-136.

Sources of Data:www.trademap.org/tradestatWorld Development Indicators — DataBank (worldbank.org)GTAP Data Bases: GTAP 10 Data Base (purdue.edu)



Tables

Table 1. Macroeconomic Indicators of Indonesia and Australia (2018/9)

Source: WDI, 2020. Productivity is own calculation



Table 2. Indonesian HS4 Products with Classification of Great and Elegance 2015–19

Source: Own calculation based on Trade Map, 2020



Table 3. Indonesian HS4 Products with Classification of Sunrise and Increase 2015–19


Table 4. Indonesian HS4 Products with Classification of Sunset and Decrease 2015–19


Table 5. Indonesia and Australia Competitiveness Combination Analysis

Combination AustraliaSuffer Sunset Sunrise Great Total

Indonesia Suffer 295 27 230 32 584Sunset 50 3 54 4 111Sunrise 168 17 184 18 387Great 68 5 67 10 150Total 581 52 535 64 1,232




Table 6. Indonesia Potential FDI Inflows from Australia


Table 7. Indonesia Potential FDI Outflows to Australia


Table 8. Trade Balance Million US$ (DTBALi) with Shocks of MFN Indonesia from Australia (-8.29%)

Source: Own calculation based on GTAP10A, 2020



Table 9. Supply Price % of change (PS) with Shocks of MFN Indonesia from Australia (-8.29%)


Table 10. Trade Balance Million US$ (DTBALi) with Shocks of MFN Australia from Indonesia (-3.04%)


Table 11. Supply Price % of change (PS) with Shocks of MFN Indonesia from Australia (-3.04%)



Gedung LPEM FEB UI

Fax : +62-21 3907235/31934310Web : http://www.lpem.org/category/publikasi/workingppers/

Jl. Salemba Raya No. 4, Jakarta 10430 Phone : +62-21 3143177 ext. 621/623;

1: depan2: editorial3: blkgWP LPEM_056_Dec 2020_K Verico.pdfIntroductionBackgroundResearch QuestionObjectiveSpecific Coverage

References, Indexes and GTAP ModelReferencesIndexesGTAP Model

Descriptive Analysis: Indonesia’s Trade Competitiveness Quantitative Analysis: RCA-CMSA and GTAP Simulation Conclusion

how to measure bilateral economic relations? case … · 2020. 12. 12. · cptpp, and indonesia...

Documents