Economic and environmental impacts of trade liberalization: The case of Indonesia
In recent years, there has been a growing interest in the environmental impacts of trade liberalization. This paper provides further discourse in this area with a study on Indonesia and its trade agreements with Japan (IJEPA) and ASEAN (AFTA). A static global CGE model, known as the Global Trade Analysis Project, was used to project the Indonesian economy to the year 2022, with and without tariff reforms agreed under the agreements. Environmental impacts are assessed using different pollution indicators--air, water and waste. The study suggests that Indonesia would grow rapidly over the period considered with a large deterioration in its environment. Following these, however, the agreements only have a marginal positive impact on Indonesia's output but with a noticeable increase in trade flows and signs of trade diversion. Overall AFTA has a greater impact on the Indonesian economy compared to IJEPA. Similarly, the impact of trade liberalization on the environment is marginal. On the whole, tariff reform is inducing air pollution and reducing water pollution. In conclusion, the study suggests that Indonesia's participation in the AFTA and IJEPA agreements is not likely to bring drastic changes to her economic and environmental performance.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Anna Strutt & Kym Anderson, 2000. "Will Trade Liberalization Harm the Environment? The Case of Indonesia to 2020," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 17(3), pages 203-232, November.
- Betina Dimaranan & Elena Ianchovichina & Will Martin, 2009.
"How will growth in China and India affect the world economy?,"
Review of World Economics (Weltwirtschaftliches Archiv),
Springer, vol. 145(3), pages 551-571, October.
- Dimaranan, Betina & Ianchovichina, Elena & Martin, William J., 2007. "China, India, and the future of the world economy : fierce competition or shared growth?," Policy Research Working Paper Series 4304, The World Bank.
- Peter J. Lloyd & Donald Maclaren, 2004. "Gains and Losses from Regional Trading Agreements: A Survey," The Economic Record, The Economic Society of Australia, vol. 80(251), pages 445-467, December.
- Robinson, Sherman & Thierfelder, Karen, 1999.
"Trade liberalization and regional integration: the search for large numbers,"
TMD discussion papers
34, International Food Policy Research Institute (IFPRI).
- Robinson, Sherman & Thierfelder, Karen, 2002. "Trade liberalisation and regional integration: the search for large numbers," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(4), December.
- Ballard, Charles L. & Cheong, Inkyo, 1997. "The effects of economic integration in the Pacific Rim: A computational general equilibrium analysis," Journal of Asian Economics, Elsevier, vol. 8(4), pages 505-524.
- Beghin, John C. & Roland-Holst, David & Van der Mensbrugghe, Dominique, 2005.
"Trade Liberalization and the Environment in the Pacific Basin: Coordinated Approaches to Mexican Trade and Environment Policy,"
Staff General Research Papers
12742, Iowa State University, Department of Economics.
- Beghin, John C. & Roland-Holst, David & Van der Mensbrugghe, Dominique, 1995. "Trade Liberalization and the Environment in the Pacific Basin: Coordinated Approaches to Mexican Trade and Environment Policy," Staff General Research Papers 1588, Iowa State University, Department of Economics.
- Dessus, Sebastien & Bussolo, Maurizio, 1998. "Is There a Trade-off Between Trade Liberalization and Pollution Abatement?: A Computable General Equilibrium Assessment Applied to Costa Rica," Journal of Policy Modeling, Elsevier, vol. 20(1), pages 11-31, February.
- World Bank, 2007. "World Development Indicators 2007," World Bank Publications, The World Bank, number 8150.
- Lee, Hiro & Roland-Holst, David, 1997. "The environment and welfare implications of trade and tax policy," Journal of Development Economics, Elsevier, vol. 52(1), pages 65-82, February.
- Shujiro Urata & Kozo Kiyota, 2003. "The Impacts of an East Asia FTA on Foreign Trade in East Asia," NBER Working Papers 10173, National Bureau of Economic Research, Inc.
- Innwon Park, 2006. "East Asian Regional Trade Agreements: Do They Promote Global Free Trade?," Pacific Economic Review, Wiley Blackwell, vol. 11(4), pages 547-568, December.
- Djoni Hartono & D.S. Priyarsono & Tien Dung Nguyen & Mitsuo Ezaki, 2007. "Regional Economic Integration and its Impacts on Growth, Poverty and Income Distribution: The Case of Indonesia," Working Papers in Economics and Development Studies (WoPEDS) 200703, Department of Economics, Padjadjaran University, revised Mar 2007.
- Robert Scollay & John P. Gilbert, 2001.
"New Regional Trading Arrangements in the Asia Pacific?,"
Peterson Institute Press: Policy Analyses in International Economics,
Peterson Institute for International Economics, number pa63, 03.
- Robert Scollay & John P. Gilbert, 2001. "New Regional Trading Arrangements in the Asia Pacific?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa63, December.
- Jong-Wha Lee & Innwon Park, 2005. "Free Trade Areas in East Asia: Discriminatory or Non-discriminatory?," The World Economy, Wiley Blackwell, vol. 28(1), pages 21-48, 01.
When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:28:y:2011:i:3:p:1030-1041. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.