Abstract
Based on the gravity theory, the development of Indonesia’s FTA with RCEP member countries over the past 20 years (2003-2022) should have increased its export market share. This expectation is because RCEP consists of nearby trading partners with large economies of scale, and Indonesia, being one of smaller country (in terms of export market share), should have benefited more. Additionally, the evolving FTAs should have led to more efficient international trade, thereby increasing market share for all member countries. However, according to ITC data, Indonesia’s export market share to RCEP has decline over the past 20 years. This decline is suspected to occur because the favorable trade conditions described by Ricardo have not been met. Therefore, this study examines comparative advantage using the RCA and RSCA indices for 33 Indonesian commodities with largest concentration (market share ≥ 0,5% in 2003) and compares them with the RSCA of the other RCEP member countries for the same commodities. The study’s results indicate that the decline in Indonesia’s market share occurred because Indonesia does not possess the ideal comparative advantage as described by Ricardo. Consequently, it is suspected that Indonesia is seeking more profitable markets in accordance with Ricardo’s conditions.
Keywords : Gravity Theory, Free Trade Area, RCEP, Comparative
Advantage
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29 июн 2024
