Whoever Asking, What is International Trade

This globalization era was influencing every behavior of countries. We could not make any policies without relevancy with another states, including relations in economical side which we call it international trade.

International trade is resource of welfare, where every state can share their needs and their productions with no worries. As the element, “no barriers” could be our principal to sell and buy import products freely. There was no discrimination in international trade. In one country to another, we almost found no taxes and quota limitation. But then, we have to know that some states still brought barriers to help their local industries. They were having mercantilism or protectionism trade.

Based on the principal, international trade has two types. They are protectionism and free trade (liberalism) type. These are made with their own purposes depend on what countries to deal with. Mercantilism (protectionism) is used to protect local development while free trade is used to spread products wider to entire world.

Most of developing countries submitted protectionism in their international trade. It helps their local industries from hard competition by foreign business. We knew that some of African states is low technological-developed. They totally refused free trade because they realize that their resources have not ready.

Meanwhile, the developed states such as United States, Japan, German, and so on, still moving their impacts through international trade. While they were promoting products, they spread out influence like what happened about Hollywood. The question is, who never enjoying movie like Mission Impossible, Men in Black, Spectre, and stuffs made by America-Entertainments was. Nobody. Outside of our consciousness, they were attracting us to change our behaviors. Press freedom, fashion, travelling-mode, or LGBT declarations were some of globalization aspects which contained in America-influenced.

Furthermore, free trade not only gives benefits in promoting ideology. We can build business easier although related with other policies. All products from the entire world competed fairly because states should reduce their sovereignty. But didn’t work with the opposition one.

As one of developing country, we know most of states in Southeast Asian, including Indonesia, was not fully practiced the free trade principal. For example, Indonesia’s government has risen quotation of beef into 198 thousands only from Australia (by April 2016). It showed how we still attempted protecting local livestock. The bigger international economic movement were feared would destabilized the price of supply. Then it affected most to the underprivileged and resulting more poverty in Indonesia, since the human resources were inadequate from health and education aspects.

These happen in other states, like Myanmar, Kamboja, Laos, and Vietnam in Southeast Asia. Beside of increasing barriers, nowadays ASEAN seemed deepening integrations between them by trading in regional area. China was impactful for their integrations due to the expansion they had recently. ASEAN Economic Community’s goal is achieving equitable development for the countries of Southeast Asia. We can say this improved free trade quality. Indonesia absolutely grabbed this chance to compete with all of the capabilities they have. Hard competition especially in regional area helped states to increase innovation. Successful is only for firms that active and frequently innovating. So, there was no reason to restrict AEC movement.

In the AEC blueprint 2025, expressed that Southeast Asia has to be more proactive within the framework and structure that been made. We need to increase development and also to seize new opportunities (ASEAN). Indonesia has adopted combination of liberalism and protectionism in their market approach. Pancasila was the main a main part of economic system in Indonesia, which is reducing government’s intervention but refused foreign monopoly firms.

Trade liberalization has been central to policy reform. This is based on the premise that once macroeconomic stabilization has been achieved and a workable political system established, openness is the key policy lever to ensure a competitive economy, by disciplining rent seekers and preventing policy backtracking. (The Political Economy of Policy Reform: Insights from Southeast Asia HAL HILL).

Bibliography

1. http://www.aseanbriefing.com/news/2014/02/13/understanding-aseans-free-trade-agreements.html

2. Andrews, Carolyn. What Is Trade? New York: Crabtree Pub., 2009.

3. Chandra, Alexander C. Indonesia and the ASEAN Free Trade Agreement: Nationalists and Regional Integration Strategy. Lanham: Lexington Books/Rowman & Littlefield Pub., 2008.

4. Dosch, Jörn. The ASEAN Economic Community: What Stands in the Way? Honolulu, HI: East-West Center, 2015.

5. Hill, Hal. "The Political Economy of Policy Reform: Insights from Southeast Asia." SSRN Electronic Journal SSRN Journal. doi:10.2139/ssrn.2260123.

6. Miller, Henrí. Free Trade versus Protectionism. New York: H.W. Wilson, 1996.

7. Narjoko, Dionisius. Special Issue on the Asean Economic Community. Amsterdam ;Lausanne: Elsevier Science, 2014.

8. "Understanding ASEAN's Free Trade Agreements - ASEAN Business News." ASEAN Business News Understanding ASEANs Free Trade Agreements Comments. 2014. Accessed July 21, 2016. http://www.aseanbriefing.com/news/2014/02/13/understanding-aseans-free-trade-agreements.html.

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