SAFEGUARD ON YARN AS A TRADE REMEDY: CASE OF INDONESIA
Keywords:
safeguard, yarn, import surge, industry competitiveness, revealed comparative advantageAbstract
As one of the major contributors of the GDP, textile industry in Indonesia contributes significantly to the economy. Import surge of yarn, the upstream product of textile industry, from 2016 to 2019 endangered the local industry and pushed government to impose safeguard in 2019-2022, which was then extended to 2026. This research aims to analyze whether safeguard is the most suitable policy to address the issue. Prior researches are mostly focused on import volume and product competitiveness. However, since one of the grand goals of safeguard is to create a space for industries to do structural adjustments, it is crucial to also evaluate industry performance. This research will evaluate those two aspects while also evaluating industry performance. Time series analysis with Error Correction Model is utilized to conduct the research. This research finds that safeguard decreases import volume in the long-run, but not in the short-run; decreases product competitiveness both in the long-run and the short-run; and increases industry performance in the long run, but not in the short run. Although it does not increase global product competitiveness, safeguard is still proven suitable as a trade remedy since it succeeds to smooth out import surge and increase industry performance, signaling for recovery from the injury. However, the industry still has to put extra effort to enhance its product competitiveness to compete in the global market. Besides, government incentive will give further support to form a resilient industry.
Keywords: safeguard, yarn, import surge, industry competitiveness, revealed comparative advantage.
References
Ahn, Dukgeun. (2006). Restructuring the WTO Safeguard System. Legal and Economic Analysis of the WTO/FTA System.
Anam, S., & Solikin, A. (2020). Dampak Kebijakan Bea Masuk Tindakan Pengamanan ter hadap Proteksi dan Daya Saing Produk Baja Lapis Aluminium Seng. Indonesian Treasury Review: Jurnal Perbendaharaan, Keuangan Negara Dan Kebijakan Publik, 5(3), 235–253. https://doi.org/10.33105/itrev.v5i3.202
Blaug, M. (1992). The methodology of economics, or, How economists explain (2nd ed.). Cambridge University Press.
Bown, C. P. (2013). How different are safeguards from antidumping? Evidence from our trade policies toward steel. Review of Industrial Organization, 42(4), 449–481. https://doi.org/10.1007/s11151-013-9382-z
Bown, C. P. (2018). Protectionism was threatening global supply chains before Trump. https://Piie. Com/Blogs/Trade-Investment-Policy-Watch/Protectionism-Was-Threateningglobal-Supply-Chains-Trump.
Central Bureau of Statistics. (2023). Proporsi Tenaga Kerja pada Sektor Industri Manufaktur (Persen), 2019-2022. https://www.bps.go.id/indicator/9/1217/1/proporsi-tenaga-kerja-pada-sektor-industri-manufaktur.html
Chang, H.-J., Wu, C.-H., Ho, J.-F., & Chen, P. (2008). On sample size in using central limit theorem for gamma distribution. Information and Management Sciences, 19(1), 153–174.
Furceri, D., Ostry, J. D., Papageorgiou, C., & Wibaux, P. (2020). Temporary trade barriers as a tool for trade retaliation.
Hays, W. L. (1994). Statistics (5th ed.). Cengage Learning.
Imbens, G. W., & Kolesar, M. (2016). Robust standard errors in small samples: Some practical advice. Review of Economics and Statistics, 98(4), 701–712.
Indonesian Safeguards Committee. (2020). Laporan Akhir Hasil Penyelidikan Tindakan Pengamanan Perdagangan Terhadap Impor Barang Benang (Selain Benang Jahit) dari Serat Stapel Sintetik dan Artifisial. http://kppi.kemendag.go.id/daftar_kasus/detail_produk/1/5/117
Indonesian Textile Association. (2019). Bukti Awal Permohonan Penyelidikan dalam Rangka Tindakan Pengamanan Perdagangan Terhadap Impor Barang Benang (Selain Benang Jahit) dari Serat Stapel Sintetik dan Artifisial. http://kppi.kemendag.go.id/daftar_kasus/detail_produk/1/5/117
Islam, M. R. (2018). Sample size and its role in Central Limit Theorem (CLT). Computational and Applied Mathematics Journal, 4(1), 1–7.
Mankiw, N. G. (2021). Principles of Economics (9th ed.). Cengage.
Ministry of Industry. (2010, July 21). Industri Tekstil dan Produk Tekstil Direvitalisasi. https://www.kemenperin.go.id/artikel/60/Industri-Tekstil-Dan-Produk-Tekstil-Di-Revitalisasi#:~:text=Industri%20tekstil%20dan%20produk%20tekstil%20merupakan%20salah%20satu%20industri%20yang,yang%20diandalkan%20untuk%20memenuhi%20kebutuhan
Ministry of Industry. (2021). Mendorong Kinerja Industri Tekstil dan Produk Tekstil di Tengah Pandemi.
Núñez García, A., & Lechuga Cardozo, J. I. (2020). Safeguarding: The case of the steel industry in Mexico. Política, Globalidad y Ciudadanía, 7(13), 93. https://doi.org/10.29105/pgc7.13-4
Nurkhamid, M., & Rahayu, S. T. (2020). Efisiensi biaya logistik dengan fasilitas kepabeanan pusat logistik berikat: Impian atau kenyataan? JURNAL PERSPEKTIF BEA DAN CUKAI, 4(1). https://doi.org/10.31092/jpbc.v4i1.763
Nurkomariyah, S., & Tyasti, A. E. (2022). The effectiveness of fabric safeguards in protecting and improving the Indonesian textile industry competitiveness. Jurnal Manajemen Dan Agribisnis. https://doi.org/10.17358/jma.19.3.351
Pallant, J. (2016). SPSS Survival Manual. McGraw-Hill.
Pambudi, L. S., & Wisnaeni, F. (2022). Pengaruh Kebijakan Pengenaan Bea Masuk Tindakan Pengamanan Terhadap Impor Produk Kain. Jurnal Hukum Magnum Opus, 5(2), 208–221. https://doi.org/10.30996/jhmo.v5i2.6667
Rachman, A. A. (2022). Examining the impact of safeguard measures on local firms’ performance [KDI School]. https://archives.kdischool.ac.kr/handle/11125/46604
Rahmadani, F., & Pahlawan, I. (2017). Pengaruh Penerapan Tindakan Pengamanan Perdagangan (Safeguard) Produk Impor Benang Asal India Bagi Industri Tpt (Tekstil Dan Produk Tekstil) Di Indonesia Tahun 2011. Jurnal Online Mahasiswa Fakultas Ilmu Sosial Dan Ilmu Politik Universitas Riau, 4(2), 1–14.
Riesfandiari, I., Nugroho, A. S., & Wahyudi, I. T. (2021). Dampak safeguard atas impor benang terhadap perekonomian: pendekatan model CGE. JURNAL PERSPEKTIF BEA DAN CUKAI, 5(2), 255–277. https://doi.org/10.31092/jpbc.v5i2.1307
Stolper, W. F., & Samuelson, P. A. (1941). Protection and real wages. The Review of Economic Studies, 9(1), 58–73. https://doi.org/10.2307/2967638
The World Bank. (2023, January 19). Temporary Trade Barriers Database, Including The Global Antidumping Database. https://datacatalog.worldbank.org/search/dataset/0039583/Temporary-Trade-Barriers-Database-including-the-Global-Antidumping-Database
Tjahjasari, A. (2015). The Impact of Antidumping Policy on the Import Volume of Steel Products in Indonesia. Economics of Development-ECD DD (ECD-DD) The Hague, the Netherlands.
Todaro, M. P., & Smith, S. C. (2014). Economic Development (12th ed.). Pearson.
World Trade Organization. (1994). Agreement on Safeguard
Downloads
Published
How to Cite
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors can enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) before and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.
