LOGO www.themegallery.com The Political Economy of International Trade Gek Sintha M.J. Wika, S.E. M.Sc.

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1 LOGO www.themegallery.com The Political Economy of International Trade Gek Sintha M.J. Wika, S.E. M.Sc.

2 www.themegallery.com Benefit of International Trade 1 Increased variety of goods Lower Cost through economic of scale23 Increased Competition 4 Facilitates the spread of technology

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5 Instruments of Trade Policy Import quotas Subsidies Administrative policies Voluntary export restraints Tariffs Antidumping policies Local content requirements How do governments intervene in international trade?

6 Tariffs Question: Why do governments impose tariffs?  Tariffs  increase government revenues  provide protection to domestic producers against foreign competitors by increasing the cost of imported foreign goods  force consumers to pay more for certain imports  So, tariffs are unambiguously pro-producer and anti- consumer, and tariffs reduce the overall efficiency of the world economy

7 SUBSIDIES www.themegallery.com

8 Import Quotas and Voluntary Export Restraints  An import quota is a direct restriction on the quantity of some good that may be imported into a country  Voluntary export restraints are quotas on trade imposed by the exporting country, typically at the request of the importing country’s government Studi Kasus: Cina Menerapkan Tarif Ekspor (EksporTekstil ke US) Sumber: The Associated Press www.themegallery.com

9 Local Content Requirements  A local content requirement demands that some specific fraction of a good be produced domestically  Local content requirements benefit domestic producers and jobs, but consumers face higher prices www.themegallery.com

10 Administrative Policies  Administrative trade polices are bureaucratic rules that are designed to make it difficult for imports to enter a country  Dumping is selling goods in a foreign market below their cost of production, or selling goods in a foreign market at below their “fair” market value  Antidumping polices are designed to punish foreign firms that engage in dumping  The goal is to protect domestic producers from “unfair” foreign competition www.themegallery.com

11 Administrative Policies  Case Study: Cina Menghadapi Tuduhan Dumping dari India (Kain Sutera) Sumber: BBC News www.themegallery.com Antidumping Policies

12 The Case for Government Intervention www.themegallery.com Question: Why do governments intervene in trade?  There are two types of arguments 1.Political arguments are concerned with protecting the interests of certain groups within a nation (normally producers), often at the expense of other groups (normally consumers) 2.Economic arguments are typically concerned with boosting the overall wealth of a nation (to the benefit of all, both producers and consumers)

13 Political Arguments for Intervention  Political arguments for government intervention include 1.protecting jobs 2.protecting industries deemed important for national security 3.retaliating to unfair foreign competition 4.protecting consumers from “dangerous” products 5.furthering the goals of foreign policy 6.protecting the human rights of individuals in exporting countries

14 Economic Arguments for Intervention  Economic arguments for government intervention in international trade include 1.The infant industry argument 2.Strategic trade policy

15 LOGO www.themegallery.com Regional Economic Integration

16 Levels of Economic Integration

17 Negara merdeka digabungkan menjadi satu kesatuan tunggal yang mengkoordinasikan kebijakan ekonomi, sosial, dan luar negeri untuk negara-negara anggota. Contoh : Negara Uni Eropa. Melibatkan arus bebas produk dan faktor produksi antara anggota, penerapan kebijakan perdagangan eksternal umum, di samping itu, mata uang bersama, harmonisasi tarif pajak negara-negara anggota. Contohnya : Uni Eropa (UE) T idak ada hambatan perdagangan antar negara anggota, kebijakan perdagangan eksternal umum, dan pergerakan bebas faktor-faktor produksi. Contohnya : MERCOSUR (antara Brasil, Argentina, Paraguay, dan Uruguay). Menghilangkan hambatan perdagangan antar negara anggota dan mengadopsi kebijakan perdagangan eksternal secara umum. Contohnya : Andes Pakta (antara Bolivia, Columbia, Ekuador, Venezuela, dan Peru) Semua hambatan untuk perdagangan barang dan jasa antara negara- negara anggota dihilangkan

18 Association of Southeast Asian Nations (ASEAN)  In 2003, an ASEAN Free Trade Area (AFTA) between the six original members of ASEAN came into full effect with a goal of reducing import tariffs among the older members  Artikel berita: ASEAN Memperoleh Manfaat dari Kebijakan Perdagangan Bebas Mereka Sumber: International Herald Tribune, 1995 www.themegallery.com

19 ASEAN ECONOMIC COMMUNITY  Free Trade in Goods  Services  Free flow of investment  Free flow of skilled labor  Freer flow of capital  Tariff will reduce to zero  No tariff barriers (subsidies, restriction)

20 APA PELUANG DAN TANTANGAN YANG DIHADAPI INDONESIA? www.themegallery.com

21 TUGAS  FDI (Foreign Direct Investment) (Chapter 7). Presentasi dan makalah. www.themegallery.com

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