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Indonesia’s Local Content Requirements: An Assessment on Consistency with Free Trade Agreement Commitments

Author

Listed:
  • Oscar Fernando

    (World Trade Organization)

  • Lili Yan Ing

    (Economic Research Institute for ASEAN and East Asia (ERIA))

Abstract

Local content requirements (LCRs) are one of several economic instruments used by governments to protect infant domestic industries or to generate employment. Indonesia has LCR policies in several sectors. However, LCRs are often inconsistent with a country’s World Trade Organization commitments. Additionally, free trade agreements could also have provisions that regulate LCRs. This paper assesses whether Indonesia’s free trade agreements have provisions on LCRs, and whether its regulations are consistent with them.

Suggested Citation

  • Oscar Fernando & Lili Yan Ing, 2022. "Indonesia’s Local Content Requirements: An Assessment on Consistency with Free Trade Agreement Commitments," Working Papers DP-2021-53, Economic Research Institute for ASEAN and East Asia (ERIA).
    • Handle: RePEc:era:wpaper:dp-2021-53
    as

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    File URL: https://www.eria.org/uploads/media/discussion-papers/FY21/Indonesias-LCR-An-Assessment-on-Consistency-with-FTA-Commitments.pdf
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    References listed on IDEAS

    as
    1. Teh, Robert & Prusa, Thomas J. & Budetta, Michele, 2007. "Trade remedy provisions in regional trade agreements," WTO Staff Working Papers ERSD-2007-03, World Trade Organization (WTO), Economic Research and Statistics Division.
    2. Archanun Kohpaiboon & Juthathip Jongwanich, 2021. "The Effect of the COVID-19 Pandemic on Global Production Sharing in East Asia," Working Papers DP-2021-03, Economic Research Institute for ASEAN and East Asia (ERIA).
    3. Shadikhodjaev,Sherzod, 2018. "Industrial Policy and the World Trade Organization," Cambridge Books, Cambridge University Press, number 9781107145085.
    4. Warr, Peter & Kohpaiboon, Archanun, 2017. "Thailand’s Automotive Manufacturing Corridor," ADB Economics Working Paper Series 519, Asian Development Bank.
    5. Susan Stone & James Messent & Dorothee Flaig, 2015. "Emerging Policy Issues: Localisation Barriers to Trade," OECD Trade Policy Papers 180, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Local Content Requirements; WTO; FTA; East Asia; Indonesia;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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