Free Trade Agreement (FTA) through economic diplomacy strategy. Study of Indonesia-Japan Economic Partnership Agreement (IJEPA)

Abstract

Free trade is considered to make a positive contribution to both domestic and international economy because of the removal of trade barriers. The importance of free trade can be seen from the increasing free trade agreements between developed and developing countries. The involvement of developing countries in free trade agreements enables them to make efficiency and maximize the benefits of implementing free trade agreements. Developing countries however often do not get results that are as expected in the Free Trade Agreement (FTA). For example, Indonesia has not yet obtained the outcomes that were expected in the implementation of the Indonesia-Japan Economic Partnership Agreement (IJEPA). The results highlight that one fundamental factor for obtaining optimal benefits from a trade agreement is internal coordination prior to the negotiation process.

The Ratification of Indonesia-Australia Comprehensive Economic Partnership Agreement: Investment Challenges and Opportunities

“…A reduction in barriers to trade in services will lower transaction costs, leading to an increase in productivity. Increased productivity of Indonesia's services sectors can have a significant impact on increasing Indonesia's services exports to Australia (Darmastuti et al, 2022). Regarding the concern that Indonesia will be dominated by foreign service providers, it can be conveyed that the service trade commitments in IA-CEPA have limitations or restrictions that need to be considered by investors, especially on Moda (commercial presence) as stipulated in Presidential Regulation No.…”