The Impact of the ASEAN-China FTA on Indonesian Employment Were Indonesians' concerns about ASEAN-China FTA justified?

Details

Supervisors

Vannoorenberghe, Gonzague

Faculty

Faculté des sciences économiques, sociales, politiques et de communication

Degree label

Master [120] en sciences économiques, orientation générale, à finalité spécialisée

Abstract

Indonesia, as part of ASEAN, had engaged in trade liberalization with China under the ACFTA. Partly as a compromise, Indonesia knew that competition from Chinese imports could have adverse effects on employment through trade diversion. However, the agreement was quite attractive, as a series of measures concerning cooperation in terms of finance, technology and development were included in the negotiation, which finally convinced Indonesia to accept it even though the discontent of Indonesian SMEs could be felt in the streets. Therefore, this paper will analyze the impact that this liberalization has had on the labor market, more precisely on employment, as well as analyze the impact on trade flows and public policy investment. As predicted by the Indonesian labor associations that were against ACFTA, Indonesia experienced a slightly negative net change in employment, especially affecting women and young workers in the textile sector mostly located in rural areas.