Impact of Non Tariff Policy on Cocoa Export Performance of Indonesia

Julia Forcina Sinuraya, Bonar M. Sinaga, Rina Oktaviani, Budiman Hutabarat

Abstract


Indonesia is a developing country that adopts the open economic system with international trade activities (export-import) as one of its economic growth keys. Each country requires trade policies to protect their domestic economic from the negative impact of the high competition of international trade. As an exporter country, Indonesia considers import trade policies that could be divided into two groups, namely tariff policy and non tariff policy that well known as tariff and non tariff barriers. Non tariff policy applied by importing country is considered as one of the problems in the development of Indonesias cocoa export. The resaerach aims at the impact analysis of non tariff policies on the performance of Indonesias cocoa export. This research uses series data of 1989-2014 with simultaneous equation model consisted by 20 structural and 9 identity equations estimated by 2SLS (Two Stage Least Squares) method. The research revealed that the application of non tariff policies by Malaysia and US has its impact to decrease the total export of cocoa beans from Indonesia (S1 and S2). Reversely, when each importing country remove their respective non tariff policy, the total export of cocoa beans from Indonesia would increase (S3 and S4). The combination of non tariff policy, applied by Malaysia and removed by US, would significantly increase the cocoa beans export to US compared to the decrease of that of to Malaysia (S6). The decrease of cocoa beans export to importing country due to application of non tariff policy could be resolved by improving the quality of the product and through some negotiations.



Keywords


cocoa; export; non tariff policy; impact.

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