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7/29/2019 Treade barriers in indonesia
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Q5. What all trade barriers have been considered in this country? Why?
A5. In recent years, Indonesia has liberalized its trade Regime and taken a number of
important steps to reduce protection. Since 1996, the Indonesian Government has issued
deregulation packages that have reduced overall tariff levels, simplified the tariff structure,
removed restrictions, replaced non-tariff barriers with more transparent tariffs, andencouraged foreign and domestic private investment. The GOI issued a deregulation package
in July 1997, which introduced additional tariff reductions. In conjunction with its
stabilization program agreement with the International Monetary Fund, the government has
issued a steady stream of reform measures which reduced taxes, tariffs, and quantitativerestrictions on exports and imports.
Trade barriersThe measurement of barriers to trade in services and the gains associated with removing such
barriers has been the focus of the literature for the past several decades. This is due in
particular to the on-going negotiations carried on at WTO. While the “invisible” barriers to
trade in goods are gradually disappearing across countries, the role of the services trade has
gained due importance in multilateral, regional and bilateral free trade agreements. In
general, barriers to trade in services are not like tariffs. They are typically regulatory barriers,
rather than explicit taxes. The underlying economic rationale for these policy reforms is that
the removal of barriers to trade in services is likely to result in lower prices, improved quality
and higher competitiveness. Services trade barriers to entry continue to exist in many sectors,
although the GOI has loosened restrictions significantly in the financial sector. Foreign law
firms, accounting firms, and consulting engineers must operate through technical assistance
or joint venture arrangements with local firms. Indonesia's Law on Education Legal Entities
does not allow foreign investment in higher education in the form of a limited liability
company, in conflict with provisions of the existing Investment Law. In addition, in order forforeign nationals to provide educational services they must be authorized by the Ministry of
Education and the Ministry of Manpower. Authorization is granted on a case-by-case basis
and only when there are no Indonesian instructors capable of filling the position.
Education:Indonesia Law on Education Legal Entities does not allow foreign investment in higher
education in the form of a limited liability company, in conflict with provisions of the
existing Investment Law. In addition, in order for foreign nationals to provide educational
services they must be authorized by the Ministry of Education and the Ministry of
Manpower. Authorization is granted on a case-by-case basis and only when there are noIndonesian instructors capable of filling the position. Foreign Institutions are compelled to do
business with local Institutions and to services locally. An on-going process of
decentralization, which is intended to reduce burdensome bureaucratic procedures by moving
investment-related decisions to provincial and district level governments, has led to some
improvements but has also resulted in new restrictive measures that conflict with national
laws.
Indonesia Proposal on higher education in the country
1. Common definitions to include middle and lower level professionals
2. Clear criteria for Economic Needs Test or quantitative restrictions to be set out in a
reference paper.
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3. A visa for the broad range of personnel covered by horizontal and sectorial
commitments under ordinary immigration rules should also be modified (within two
to four weeks).
4. Recognition of qualified and licensing requirements through Mutual Recognition
Agreements and development of minimalist accreditation standards to overcome
national requirements.5. Waiver in payment of social security taxes without corresponding benefits.
Barriers to trade in higher education services
Mode Barrier Barrier
types
Cross-border
supply
1. Restrictions on import of electronically produced Invisible
educational material
2. Restrictions on electronic transmission of course Material
3. Non-recognition of degrees obtained through distance learning
Invisible
Consumption
abroad
1.Restrictions on travel abroad based on discipline Invisible
or area of study
2. Foreign exchange controls (limitations)
3. Mutual recognition of degree
Invisible
Commercial
presence
1.Insistence on a local partner Invisible
2. Insistence that the provider be accredited in the home country
3.Insistence on partner/collaborator being from the formal academic
stream
4. Insistence on equal academic participation by
foreign and local partner
5.Disapproval of franchise operations
6. Difficulty in approval of joint ventures
Invisible
Presence of
natural
Persons
1.Visa and entry restrictions
2. Restriction on basis of quota for countries an disciplines
3. Nationality or residence requirements, language
4. Restriction on repatriation of earnings
Invisible
Document requirements
The government requires the following documents:
1. pro-forma invoice commercial invoice
2. Certificate of origin bill of lading3. Insurance certificate special certificates
According to the Indonesian Customs Law that came into effect in April 1997, importers are
now required to notify the Customs Office in the first stage by submitting the import
documents on a standard form computer diskette. Customs Inspections of imported goods
may be made after they are imported in the importer's warehouse. Typically, the Indonesian
importer takes care of this process.
References:
- http://www.ustr.gov/sites/default/files/Indonesia_0.pdf
7/29/2019 Treade barriers in indonesia
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- http://unctad.org/en/docs/itcdtab29_en.pdf
- http://www.fao.org/docrep/005/Y4632E/y4632e0l.htm
http://www.unescap.org/tid/artnet/mtg/consult3_s3ajitava.pdf
http://www.unescap.org/tid/publication/aptir2470_ajitava_prabir.pdf