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Fisheries Trade Liberalisation: Impact on Indonesia's Fish and Fish Product
Fish is one of the world’s most highly traded commodities and also one of the most important export commodities for the developing countries including Indonesia. However, Indonesia’s market access continues to pose serious obstacles for Indonesia to expand its exports in the forms of tariff barriers and non-tariff barriers. This study aims to assess the potential impact of trade liberalisation of Indonesia’s fish and fish products in major importing countries. This study employs econometric analysis to examine the impacts of tariff elimination of fish and fish products in major importing countries. For purposes of analysis, import demand functions are estimated for three c ountries (regions) that account for the majority of Indonesia’s fish and fish products imports - the United States (US), Japan, and the European Union (EU) and followed by a simple simulation on tariff removal on fish and fish products. This study also uses descriptive analysis, such as identifying the non-tariff barriers to Indonesia’s fish and fish products in the major importing countries and examining possible impact of non tariff-barriers. The estimation result and policy simulation on fish and fish products have confirmed that the tariff removal seemingly has modest impact on quantity change. This is because most of tariff rates, particularly on unprocessed/raw fish, is already low, even zero. This study also confirmed that the increase of safety standard of fish and fish products has adverse effect on the import demand of fish and fish products from Indonesia. The import demand of fish and fish products have tended to decline since the more stringent regulations are imposed. Efforts to meet this safety standard would likely be the major challenge for Indonesia covering the production system, infrastructure, and low level of national safety regulations.
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